SOURCE: MamaMancini's Holdings, Inc.

June 13, 2016 06:20 ET

MamaMancini's Reports First Quarter Fiscal Year 2017 Financial Results

First Quarter Revenue Up 21%; Gross Margin Up to 38% vs 26%; *Cash EBITDA of $200,691 Improves $984,000 Over Prior Year; Forecast 50% Sales Growth in Q2 2017 Over Prior Year Quarter

EAST RUTHERFORD, NJ--(Marketwired - Jun 13, 2016) - MamaMancini's Holdings, Inc. (the "Company" or "MamaMancini's") (OTCQB: MMMB), a marketer of specialty pre-prepared, frozen and refrigerated all natural food products (as defined by the United States Department of Agriculture), today announced financial results for the first quarter of fiscal year 2017, ended April 30, 2016.

Fiscal First Quarter Highlights:

  • First quarter 2017 revenue increased 21% to $3.9 million compared to first quarter 2016 revenue of $3.2 million.
  • First quarter 2017 gross margin increased substantially to 38% compared to 26% in the first quarter of fiscal 2016. Gross margin for full year fiscal 2017 expected to be approximately 35%.
  • Total operating expenses for the first quarter decreased nine percent versus the comparable quarter of fiscal 2016 as the Company continued to enhance operating efficiencies.
  • Loss from Operations for the first quarter fiscal 2017 improved 94% to $(55,220) versus $(852,647) in the prior year first quarter.
  • Net loss for first quarter fiscal 2017 improved 79% to $(226,107) compared to $(1.1 million) in the first quarter of fiscal 2016. EPS for first quarter fiscal 2017 was $(0.01) compared to $(0.04) in first quarter fiscal 2016.
  • Initial shipments commenced in the first quarter of fiscal 2017 to several new chain customers contracted in fiscal 2016 and in the first quarter of 2017.
  • Since January 31, 2016, the Company increased its placements with new customers from 10,100 to 11,400 store locations and increased its placements on grocer's shelves from approximately 32,000 to 35,000.
  • *Cash EBITDA, a non-GAAP financial metric, for the first quarter of fiscal 2017 was positive $200,691 compared with negative $(783,405) in the first fiscal quarter of 2016.

Carl Wolf, Chief Executive Officer of MamaMancini's, commented, "We are off to a very strong start in fiscal year 2017. Revenue for the quarter increased 21% as product deliveries commenced to many of the new retail store chain customers developed in the latter part of fiscal 2016 and in the just completed first quarter. Our strategy of developing larger customers and exiting underperforming accounts that do not generate reasonable returns has achieved measurable results.

"During fiscal 2016 we strategically exited approximately 25% of our account base that did not generate appropriate margins. Consequently, our now sustainable account base generated a significantly increased gross margin of 38% for the first quarter of fiscal 2017 versus 26% in last year's comparable quarter; with our expectation for gross margin for the full year to be approximately 35% depending upon manufacturing efficiencies and customer mix. Operating expenses for the first quarter were down nine percent as we continue to improve operating efficiencies. Taken together all of these operating metrics translated into a significant positive impact on our operating and bottom-line results during the first quarter of fiscal 2017."

"Another important initiative is to grow our presence on the perimeter of the retail grocery stores in which our products are sold," continued Mr. Wolf. "The perimeter of the store is where fresh, minimally or non-processed, healthy foods are offered. On an industry-wide basis, this outer band of the retail grocery store is growing at an estimated 10% annual rate compared to the middle of the store which is experiencing a one to two percent annual decline.

"We are gaining traction with this initiative as a growing percentage of our overall business is now taking place around the perimeter of the store. The trend among consumers for high quality, fresh, take-out food at their local grocery store continues to grow as busy work and family schedules demand nutritious meals with minimal prep time. Our products fit perfectly with the evolving everyday life of millions of Americans."

Mr. Wolf concluded, "We are pleased with the results of the first quarter of fiscal 2017. Although our products appeared in 10% fewer stores and on 7% fewer shelves than last year at the end of the first quarter, we generated significantly more revenue and dramatically expanded our gross margin.

"Looking ahead to second quarter 2017, we expect revenue to grow by approximately 50% compared to the first quarter of fiscal 2016 as we continue to add new customers, exit accounts that do not generate reasonable margins and manage our business more efficiently. We believe that the strategies now in place position MamaMancini's Holdings for improved operational and financial performance in the coming years."

First Quarter 2017 Results
Sales, net of slotting fees and discounts, were $3.9 million for the first quarter of fiscal 2017, a 21% increase compared to $3.2 million reported in the first quarter of fiscal 2016. The increase in sales was primarily driven by the addition of new customers in the first quarter of fiscal 2017 and in the final months of fiscal year 2016. As of April 30, 2016, the Company's products were sold in approximately 11,400 stores, with an average of 3.07 product SKUs in each store, aggregating to approximately 35,000 retail and grocery shelf placements throughout the U.S. That compares with approximately 37,600 shelf placements as of April 30, 2015.

Gross profit for the first quarter of fiscal 2017 was $1.5 million, or 38% of sales, compared to $828,191, or 26% of sales, in the year ago period. The increase in gross margin is primarily attributed to increased revenue during the first quarter of fiscal 2017 and the exiting of a substantial number of underperforming low margin accounts during the previous fiscal year.

Net loss for the first quarter of fiscal 2017 was ($226,107), or ($0.01) per basic and diluted share, compared to a net loss of $(1.1 million), or ($0.04) per basic and diluted share, in the first quarter of fiscal 2016.

(*Cash EBITDA = EBITDA plus any non-cash stock payments for expenses.)

Conference Call
The Company has scheduled a conference call for Tuesday, June 14, 2016, at 10:00 am ET to review the results of the first fiscal quarter ended April 30, 2016.

Interested parties may participate on the conference call by dialing 1-605-562-3140; passcode 333016#. Please dial-in five minutes prior to the start time.

About MamaMancini's
MamaMancini's is a marketer and distributor of a line of beef meatballs, turkey meatballs, and chicken meatballs all with sauce, five cheese stuffed beef, turkey and chicken meatballs all with sauce, original beef and turkey meatloaves and bacon gorgonzola beef meatloaf, and other similar Italian cuisine products. The Company's sales have been growing on a consistent basis as the Company expands its distribution channel, which includes major retailers such as Costco, Publix, Shop Rite, Price Chopper, Harris Teeter, SaveMarts, Luckys, Lunds/Byerly's, SuperValu, Safeway, Albertsons, Spartan Stores, Bashas, Whole Foods, Shaw's Supermarkets, Kings, Roche Brothers, Key Foods, Stop-n-Shop, Giant Stores, Giant Eagle, Food Town, Randalls, Kroger, Shoppers, Marsh's Supermarkets, King Kullen, Lowes Stores, Central Markets, Weis Markets, Ingles, and The Fresh Market.

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, 2017 and other filings made by the Company with the Securities and Exchange Commission

Financial Tables to Follow

 
MamaMancini's Holdings, Inc.
Condensed Consolidated Balance Sheets
 
  April 30,
2016
  January 31,
2016
 
  (unaudited)      
Assets            
             
Assets:            
Cash $ 502,459   $ 587,422  
Accounts receivable, net   1,725,201     1,476,582  
Inventories   506,985     252,752  
Prepaid expenses   169,545     154,458  
Due from manufacturer - related party   2,197,051     2,248,781  
Total current assets   5,101,241     4,719,995  
             
Property and equipment, net   989,402     1,047,455  
Total Assets $ 6,090,643   $ 5,767,450  
             
Liabilities and Stockholders' Equity            
             
Liabilities:            
Accounts payable and accrued expenses $ 691,977   $ 769,551  
Line of credit, net   1,423,165     933,001  
Term loan   120,000     120,000  
Promissory notes   240,761     266,808  
Notes payable - related party   -     125,000  
Convertible note payable, net   2,540,000     2,540,000  
Total current liabilities   5,015,903     4,754,360  
             
Term loan - net of current   290,000     320,000  
Promissory notes - net of current portion   16,324     69,767  
Notes payable - related party   125,000     -  
Total long-term liabilities   431,324     389,767  
             
Total Liabilities   5,447,227     5,144,127  
             
Commitments and contingencies            
             
Stockholders' Equity            
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 and 0 shares issued and outstanding, respectively   -     -  
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; 26,955,503 and 26,507,516 shares issued and outstanding, respectively   270     265  
Additional paid in capital   15,265,644     14,954,928  
Common stock subscribed, $0.00001 par value; 66,667 and 66,667 shares, respectively   1     1  
Accumulated deficit   (14,472,999 )   (14,182,371 )
             
Less: Treasury stock, 230,000 and 0 shares, respectively   (149,500 )   (149,500 )
Total Stockholders' Equity   643,416     623,323  
             
Total Liabilities and Stockholders' Equity $ 6,090,643   $ 5,767,450  
             
 
MamaMancini's Holdings, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
 
    For the Three Months Ended  
    April 30, 2016     April 30, 2015  
                 
Sales - net of slotting fees and discounts   $ 3,923,977     $ 3,236,490  
                 
Cost of sales     2,448,778       2,408,299  
                 
Gross profit     1,475,199       828,191  
                 
Operating expenses                
Research and development     30,562       23,079  
General and administrative expenses     1,499,857       1,657,759  
  Total operating expenses     1,530,419       1,680,838  
                 
Loss from operations     (55,220 )     (852,647 )
                 
Other expenses                
Interest expense     (161,762 )     (123,357 )
Amortization of debt discount     (9,125 )     (118,552 )
  Total other expenses     (170,887 )     (241,909 )
                 
Net loss     (226,107 )     (1,094,556 )
                 
Less: preferred dividends     (64,521 )     -  
                 
Net loss available to common stockholders   $ (290,628 )   $ (1,094,556 )
                 
Net loss per common share - basic and diluted   $ (0.01 )   $ (0.04 )
                 
Weighted average common shares outstanding -basic and diluted     26,507,516       26,057,141  
                 
 
MamaMancini's Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
  For the Three Months Ended  
  April 30, 2016     April 30, 2015  
               
CASH FLOWS FROM OPERATING ACTIVITIES:              
Net loss $ (226,107 )   $ (1,094,556 )
  Adjustments to reconcile net loss to net cash used in operating activities:              
    Depreciation   76,703       67,200  
    Amortization of debt discount   9,125       109,978  
    Share-based compensation   179,208       2,042  
Changes in operating assets and liabilities:              
  (Increase) Decrease in:              
    Accounts receivable   (248,619 )     967,934  
    Inventories   (254,233 )     (168,175 )
    Prepaid expenses   (15,087 )     (5,016 )
    Due from manufacturer - related party   51,730       7,621  
  Increase (Decrease) in:              
    Accounts payable and accrued expenses   (10,582 )     (223,783 )
      Net Cash Used In Operating Activities   (437,862 )     (336,755 )
               
CASH FLOWS FROM INVESTING ACTIVITIES:              
Cash paid for fixed assets   (18,650 )     (65,494 )
Net Cash Used In Investing Activities   (18,650 )     (65,494 )
               
CASH FLOWS FROM FINANCING ACTIVITIES:              
Deferred offering costs   -       (10,000 )
Proceeds from demand notes   -       450,000  
Borrowings (repayments) of line of credit, net   481,039       (462,779 )
Repayment of term loan   (30,000 )     (30,000 )
Repayment of promissory notes   (79,490 )     -  
      Net Cash Provided By (Used in) Financing Activities   371,549       (52,779 )
               
Net Decrease in Cash   (84,963 )     (455,028 )
               
Cash - Beginning of Period   587,422       854,995  
               
Cash - End of Period $ 502,459     $ 399,967  
               
SUPPLEMENTARY CASH FLOW INFORMATION:              
Cash Paid During the Period for:              
    Income taxes $ -     $ -  
    Interest $ 72,311     $ -  
               
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:              
               
Stock issued for debt discount on convertible note $ -     $ 39,600  
Accrued dividends $ 64,521     $ -  
Stock issued for Series A Preferred dividends $ 131,513     $ -  
               

Contact Information

  • Contact:
    Carl Wolf
    Chairman and CEO
    MamaMancini's Holdings, Inc. (OTCQB: MMMB)
    973-985-0280