SOURCE: MamaMancini's Holdings, Inc

MamaMancini's Holdings, Inc

March 23, 2017 13:20 ET

MamaMancini's Reports Fiscal Year 2017 Financial Results

Fiscal 2017 Revenue Up 43%; Q4 Revenue Up 65%

2017 Operating Income $0.4 million vs. Loss of $(2.3 million) in 2016

2017 Gross Margin Improved to 36% vs. 29%

Company reports 2nd consecutive profitable quarter

EAST RUTHERFORD, NJ--(Marketwired - Mar 23, 2017) -  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 fourth quarter and fiscal year 2017, ended January 31, 2017.

Fourth Quarter Highlights:

  • Fourth quarter of fiscal year 2017 revenue increased 65% to $5.4 million compared to $3.3 million in prior year period.
  • Gross margin for the fourth quarter increased to 36.4%, compared to 31.2% for fiscal 2016.
  • Cash EBITDA, a non-GAAP financial metric (please refer to Non-GAAP Financial Measures paragraph below), for the fourth quarter was $544,000, compared to a negative $32,000 in the fourth quarter a year ago.
  • Net income for the fourth quarter was $133,000 versus net loss of $441,000 in prior year period.
  • Net income available to common stockholders was $86,000, or $0.00 per diluted share, during the fourth quarter of fiscal 2017, compared to a net loss of $477,000, or $(0.02) per diluted share in the same quarter last year.

Fiscal Year Highlights:

  • Fiscal year 2017 revenue increased 43% to $18.0 million compared to fiscal 2016 revenue of $12.6 million.
  • Fiscal year 2017 gross margin increased to 36% compared to 29% for fiscal 2016.
  • Total operating expenses for the fiscal year 2017 increased 3.9% versus the comparable fiscal 2016. As a percentage of sales, operating expenses decreased to 33.7% of net sales from 46.5% in the comparable 2016 year.
  • Income from operations for fiscal 2017 improved to $407,009 versus $(2,259,317) in the prior year; an improvement of $2,666,326 from the prior fiscal year.
  • Placements on grocer's shelves increased at the end of the fiscal 2017 to 38,700, up sequentially from approximately 37,700 at the end of the third quarter of this fiscal year, and up from 32,000 as of January 31, 2016.
  • Cash EBITDA for fiscal 2017 was approximately a positive $1.4 million compared with negative $1.7 million in fiscal 2016, an improvement of $3.1 million.
  • Net loss for fiscal year 2017 was $289,140, compared with a net loss of $3,511,618 in fiscal 2016.
  • Net loss available to common stockholders for the fiscal year was $0.5 million, or $(0.02) per diluted share, compared to a net loss of $3.6 million, or $(0.14) per diluted share, in fiscal 2016.

Carl Wolf, Chief Executive Officer of MamaMancini's, commented, "Fiscal 2017 was a pivotal year for MamaMancini's as revenue increased 43% and we achieved profitability in the third and fourth quarters of the fiscal year. Gross margin for the year improved to 36% from 29% and operating income for the fiscal year improved by more than $2.6 million, moving from negative to positive, as we continue to develop larger retail store accounts that drive revenue and as we operate more efficiently. Breaking into profitability has been an important strategic goal and we will look to achieving profitability for all of fiscal 2018."

"Operationally, we will continue to focus on selling our products into the food service area, on the perimeter of the retail grocery store, where fresh, minimally or non-processed, healthy foods are offered, and where the superior revenue and margin opportunities exist," added Mr. Wolf. "We continue to develop new product offerings that will add value to our end-user customers that rely on great tasting food with superior nutritional profiles and minimal prep time. During fiscal 2017, we added several new products, including meatloaves and a stuffed pepper kit, both of which have received positive feedback and several key orders."

Mr. Wolf concluded, "Our new advertising and marketing campaign has commenced and has improved our reach by gaining several new media placements. On National Meatball Day --March 9th, we captured nearly 20 million new impressions via different mediums which we believe will expand our reach, contribute to attracting new large national accounts, and help us to gain a substantial number of new consumers around the country."

Fourth Quarter 2017 Results
Sales, net of slotting fees and discounts, were $5.4 million for the fourth quarter of fiscal 2017, a 65% increase compared to $3.3 million reported in the fourth quarter of fiscal 2016. The increase in sales was primarily driven by the addition of new customers in the first half of fiscal 2017. As of January 31, 2017, the Company's products were sold in approximately 11,700 stores, with an average of 3.3 product SKUs in each store, aggregating to approximately 38,700 retail and grocery shelf placements throughout the U.S.

Gross profit for the fourth quarter of fiscal 2017 was $1.97 million, or 36.4% of sales, compared to $1.02 million, or 31.2% of sales, in the year ago period. The increase in gross margin is primarily attributed to increased revenue during the fourth quarter of fiscal 2017 from new retail store customers and the exiting of a substantial number of underperforming low margin accounts during the previous fiscal year.

Net income for the fourth quarter of fiscal 2017 was $133,000, compared to a net loss of $441,000 in the fourth quarter of fiscal 2016.

Fiscal 2017 Results
Sales, net of slotting fees and discounts, were $18.0 million for fiscal 2017, a 43% increase compared to $12.6 million reported in fiscal 2016. The increase in sales was primarily driven by the addition of new customers in the first half of fiscal 2017 and in the final months of fiscal year 2016.

Gross profit for fiscal 2017 was $6.5 million, or 36% of sales, compared to $3.6 million, or 29% of sales, in the year ago period. The increase in gross margin is primarily attributed to increased revenue during the first half of fiscal 2017 from new retail store customers and the exiting of a substantial number of underperforming low margin accounts during the previous fiscal year.

Net loss for fiscal 2017 was $289,140, compared to a net loss of $3,511,618 for fiscal 2016.

Outlook
The Company's strategy of developing larger customers and exiting underperforming accounts that do not generate attractive returns has achieved improving operating results. The Company expects a continuation of revenue growth for the foreseeable future as it continues to develop larger accounts and introduce new product lines. As a result, the company is anticipating fiscal 2018 revenues to increase substantially over prior year and report continued profitability.

Non-GAAP Financial Measures
The Company uses Cash EBITDA as a non-GAAP financial measure. The Company defines Cash EBITDA as earnings before income taxes, depreciation and amortization plus any non-cash stock payments for expenses. The Company believes that the use of Cash EBITDA is useful to investors and other users of its financial statements in evaluating the Company's operating performance because it provides them with an additional tool to compare business performance across companies and across periods. The Company uses Cash EBITDA in conjunction with traditional GAAP operating performance measures as part of its overall assessment of its performance, for planning purposes, including the preparation of its annual operating budget, and to evaluate the effectiveness of its business strategies. Management does not place undue reliance on Cash EBITDA as its only measure of operating performance. Cash EBITDA should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP.

Conference Call
The Company has scheduled a conference call for Friday, March 24, 2017, at 9:00 am ET to review the results.

Interested parties may participate on the conference call by dialing (844) 889-4326 or (412) 317-9264. A replay of the conference call will be available by dialing (877) 344-7529 or (412) 317-0088, confirmation code 10103610, through March 31, 2017.

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 Publix, Shop Rite, Jewel, Save Mart, Lucky's, Lunds and Byerlys, SUPERVALU, Safeway, Albertsons, Whole Foods Market, Shaw's, Kings, Roche Bros., Key Foods, Stop & Shop, Giant, Giant Eagle, Foodtown, Sam's Club, SpartanNash, Hy-Vee, Topps, Kroger, Shoppers, Marsh, King Kullen, Central Markets, Weis Markets, Ingles, and The Fresh Market. The Company sells to distributors such as Sysco, AWI, UNFI, Driscoll Foods, SUPERVALU, Monterrey Provision Co., Burris Logistics and C&S Wholesale Grocers. In addition, the Company sells a wide variety of its products through QVC, the world's largest direct to consumer marketer, via on air presentations, auto ship programs, and direct purchases through the internet.

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.  
Consolidated Balance Sheets  
   
    January 31,     January 31,  
    2017     2016  
             
Assets  
                 
Assets:                
Cash   $ 666,580     $ 587,422  
Accounts receivable, net     1,817,820       1,476,582  
Inventories     443,623       252,752  
Prepaid expenses     135,747       154,458  
Due from manufacturer - related party     2,079,708       2,248,781  
Total current assets     5,143,478       4,719,995  
                 
Property and equipment, net     1,175,508       1,047,455  
Total Assets   $ 6,318,986     $ 5,767,450  
                 
Liabilities and Stockholders' Equity  
                 
Liabilities:                
Accounts payable and accrued expenses   $ 484,752     $ 769,551  
Line of credit, net     1,363,145       933,001  
Term loan     140,004       120,000  
Promissory notes     -       266,808  
Notes payable - related party     -       125,000  
Note payable - net     1,401,906       -  
Convertible note payable - net     -       2,540,000  
Total current liabilities     3,389,807       4,754,360  
                 
Term loan - net of current     513,328       320,000  
Promissory notes - net of current portion     -       69,767  
Note payable - net of current portion     1,298,819       -  
Notes payable - related party     117,656       -  
Total long-term liabilities     1,929,803       389,767  
                 
Total Liabilities     5,319,610       5,144,127  
                 
Commitments and contingencies                
                 
Stockholders' Equity:                
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized;                
  23,400 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;                
  27,810,717 and 26,507,516 shares issued and outstanding, respectively     278       265  
Additional paid in capital     15,825,029       14,954,928  
Common stock subscribed, $0.00001 par value; 66,667 shares, respectively     1       1  
Accumulated deficit     (14,676,432 )     (14,182,371 )
                 
Less: Treasury stock, 230,000 shares, respectively     (149,500 )     (149,500 )
Total Stockholders' Equity     999,376       623,323  
Total Liabilities and Stockholders' Equity   $ 6,318,986     $ 5,767,450  
                 
                 
   
   
MamaMancini's Holdings, Inc.  
Consolidated Statements of Operations  
             
    For the Years Ended  
    January 31, 2017     January 31, 2016  
                 
                 
Sales - net of slotting fees and discounts   $ 18,048,792     $ 12,603,447  
                 
Cost of sales     11,555,976       9,006,220  
                 
Gross profit     6,492,816       3,597,227  
                 
Operating expenses                
  Research and development     144,013       107,632  
  General and administrative expenses     5,941,794       5,748,912  
    Total operating expenses     6,085,807       5,856,544  
                 
Income (loss) from operations     407,009       (2,259,317 )
                 
Other expenses                
  Interest expense     (667,623 )     (555,071 )
  Amortization of debt discount     (28,526 )     (261,670 )
  Amortization of closing costs     -       (55,471 )
  Loss on debt extinguishment     -       (380,089 )
    Total other expenses     (696,149 )     (1,252,301 )
                 
Net loss     (289,140 )     (3,511,618 )
                 
Less: preferred dividends     (204,921 )     (66,992 )
                 
Net loss available to common stockholders   $ (494,061 )   $ (3,578,610 )
                 
Net loss per common share - basic and diluted   $ (0.02 )   $ (0.14 )
                 
Weighted average common shares outstanding                
- basic and diluted     27,100,316       26,147,913  
                 
   
   
MamaMancini's Holdings, Inc.  
Consolidated Statements of Cash Flows  
             
    For the Years Ended  
    January 31, 2017     January 31, 2016  
                 
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (289,140 )   $ (3,511,618 )
  Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                
      Depreciation     348,814       285,516  
      Amortization of debt discount and debt issuance costs     28,526       317,141  
      Amortization of deferred offering costs     -       10,021  
      Share-based compensation     598,200       245,547  
      Loss on extinguishment of debt     -       380,089  
  Changes in operating assets and liabilities:                
    (Increase) Decrease in:                
      Accounts receivable     (341,238 )     756,629  
      Inventories     (190,871 )     48,418  
      Prepaid expenses     18,711       (47,216 )
      Due from manufacturer - related party     169,073       (35,744 )
      Increase (Decrease) in:                
        Accounts payable and accrued expenses     140,717       290,958  
          Net Cash Provided by (Used In) Operating Activities     482,792       (1,260,259 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Cash paid for fixed assets     (476,867 )     (208,226 )
          Net Cash Used In Investing Activities     (476,867 )     (208,226 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from issuance of preferred stock     -       1,580,000  
Stock issuance costs     -       (436,330 )
Deferred offering costs     -       (10,021 )
Proceeds from demand notes     -       650,000  
Proceeds from notes payable - related party     -       125,000  
Repayment of note payable - related party     (7,344 )     -  
Repayment of note payable     (149,704 )     -  
Debt issuance costs     (50,000 )     -  
Borrowings (repayments) of line of credit, net     403,524       (449,477 )
Borrowings from term loan     340,000       -  
Repayment of term loan     (126,668 )     (120,000 )
Repayment of promissory notes     (336,575 )     (138,260 )
          Net Cash Provided By Financing Activities     73,233       1,200,912  
                 
Net Increase (Decrease) in Cash     79,158       (267,573 )
                 
Cash - Beginning of Period     587,422       854,995  
                 
Cash - End of Period   $ 666,580     $ 587,422  
                 
SUPPLEMENTARY CASH FLOW INFORMATION:                
Cash Paid During the Period for:                
  Income taxes   $ -     $ -  
  Interest   $ 399,106     $ 488,682  
                 
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                
                 
Stock issued for Series A Preferred dividends   $ 271,914     $ -  
Accrued interest reclassified to principal balance of convertible note   $ 358,523     $ 220,000  
Accrued dividends   $ -     $ 66,992  
Stock issuance costs paid in the form of warrants   $ -     $ 241,769  
Conversion of demand notes to preferred stock   $ -     $ 650,000  
Stock issued for debt discount on convertible note   $ -     $ 39,600  
Repurchase of common stock issued for amendment of convertible note   $ -     $ 149,500  
Promissory note issued for accounts payable   $ -     $ 474,835  
Series A Preferred and warrants issued for accounts payable   $ -     $ 110,000  
                 

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