SOURCE: MamaMancini's Holdings, Inc

April 21, 2016 16:52 ET

MamaMancini's Reports Fourth Quarter and Fiscal Year 2016 Financial Results

Full Year Revenue Up 5%; Fourth Quarter Gross Margin: 34.4%; Fourth Quarter Operating Results Show Significant Improvement Over Prior Year

EAST RUTHERFORD, NJ--(Marketwired - Apr 21, 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 its financial results for the fourth quarter and fiscal year ended January 31, 2016.

Fiscal Fourth Quarter and Full Year 2016 Highlights:

  • Full year 2016 revenue increased 5% to $12.6 million compared to full year 2015 reflecting the strategic exit from a substantial number of lower margin accounts in 2016.
  • Fourth quarter 2016 revenue of $3.4 million was generated off a 25% lower account base as the Company strategically exited from a substantial number of lower margin accounts in 2016. Fourth quarter 2015 revenue was $3.6 million.
  • Fourth quarter 2016 gross margin increased substantially to 34.4% compared to 23.5% in the fourth quarter of fiscal 2015.
  • Total operating expenses for the fourth quarter decreased 36% versus the comparable quarter of fiscal 2015 as the Company continued to enhance operating efficiencies.
  • Operating Loss in the fourth quarter improved by 81% to $(277,001) from $(1,450,864) in fourth quarter of fiscal 2015.
  • Net loss for the fourth quarter of fiscal 2016 improved 74% to $(441,243) from $(1.7 million) in the fourth quarter of fiscal 2015.
  • Gross margin for fiscal year 2016 increased 180 basis points to 28.5% versus 26.7% in fiscal 2015.
  • Loss from Operations for the year improved 40% to $(2,259,317) versus $(3,750,190) in prior year.
  • Net loss for fiscal 2016 improved 14% to $(3.51 million) compared to $(4.06 million) in fiscal 2015. EPS for fiscal 2016 was $(0.14) compared to $(0.16) in fiscal 2015.
  • The Company added QVC as a major new customer in fiscal 2016.
  • Several new chain customers were contracted in fiscal 2016 with initial shipments commencing in first quarter of fiscal 2017.
  • On November 20, 2015, the Company completed a convertible preferred equity financing which resulted in gross proceeds of $2.23 million and $1.83 million in net proceeds. The financing which began in June 2015, included investment by the Company's management of $1.0 million.
  • During the fourth quarter of fiscal 2016 the Company appointed an active broker network in the western U.S. to expand the Company's national sales coverage to approximately 90% of the 48 contiguous U.S. states. 

Carl Wolf, Chief Executive Officer of MamaMancini's, commented, "We had a solid fourth quarter with substantially higher gross margins, lower operating expenses, and dramatic improvement in our operating and bottom-line results. Revenue for the quarter was marginally lower, 4%, than the comparable quarter last year. However, we strategically exited approximately 25% of our account base during the year that did not generate appropriate margins. Consequently, our now sustainable account base generated a significantly increased gross margin of 34.4% for the fourth quarter of fiscal 2016 versus 23.5% for last year's fourth quarter. In addition, total operating expenses for the quarter decreased by 36% as we continued to enhance operating efficiencies. The net result was significant improvement in our operating and net loss for the quarter. We are pleased with these operating improvements and we believe they will continue into the new fiscal year and will set the stage improved financial performance in fiscal 2017 and in the coming years."

"Strategically, we are dedicated to growing our presence in 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. Along with our distributors we are working hard to gain more shelf space and placement in this fast growing section.

"In that regard, we have activated the western U.S. sales territory with the appointment of an active broker network this past December. We now effectively have sales coverage of approximately 90% of the contiguous 48 U.S. states and are now better positioned for revenue growth in the coming years. In addition to expanding our national sales coverage, we are also pursuing growth in the club store segment where our products can gain heightened consumer acceptance while supporting product purchases at the retail level."

Mr. Wolf concluded, "All in all, fiscal 2016 was a solid year for MamaMancini's. The Company added substantial new retail chains, exited from non-profitable accounts, increased gross margins, expanded business with existing high quality accounts and we maintain an active relationship with QVC. We expect to see meaningfully improved operating and financial performance in fiscal 2016 and in the years to come."

Fiscal 2016 Results
Sales, net of slotting fees and discounts, increased 5% for full year 2016 to $12.6 million compared to $12.0 million in fiscal 2015. Sales for the year were impacted by the Company's deliberate termination of certain unprofitable accounts, which accounted for 25% of the company's accounts in the prior year.

Gross profit for the fiscal year was $3.6 million, or 29% of sales, for the fiscal year ended January 31, 2016 compared to $3.2 million, or 27% of sales, primarily driven by improved operating efficiencies, price increases, lower commodity costs, and exiting low margin business.

As of January 31, 2016, the Company's products were sold in approximately 10,100 stores, with an average of 3.16 product SKUs in each store, aggregating to approximately 32,000 retail and grocery shelf placements throughout the U.S. That compares with approximately 37,000 shelf placements as of January 31, 2015.

Net loss for the fiscal year ended January 31, 2016 was $(3.51 million), or $(0.14) per basic and diluted share, compared to a net loss of $(4.06 million), or $(0.16) per basic and diluted share, in fiscal year 2015.

Fourth Quarter 2016 Results
Sales, net of slotting fees and discounts, were $3.4 million for the fourth fiscal quarter ended January 31, 2016, a decrease of 3.8% from $3.6 million for the comparable quarter in fiscal 2015. The decrease in sales is primarily related to the Company's deliberate termination of certain unprofitable accounts, which accounted for approximately 25% of the Company's accounts in the prior year.

Gross profit was $1.18 million, or 34.4% of sales, for the three months ended January 31, 2016 compared to $838,184, or 23.6% of sales, in the year ago period.

Net loss for the fourth fiscal quarter ended January 31, 2016 was ($441,234), or ($0.02) per basic and diluted share, compared to a net loss of $(1.7 million), or ($0.07) per basic and diluted share, in the fourth quarter of fiscal 2015.

Conference Call
The Company has scheduled a conference call for Friday, April 22, 2016, at 10:00 am ET to review the results of the fourth quarter and fiscal year ended January 31, 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 with sauce, turkey meatballs with sauce, chicken meatballs with sauce, pork meatballs with sauce, and other similar Italian 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, Raley's, BJ's, Whole Foods, Shaw's Supermarkets, Kings, Key Foods, Stop-n-Shop, Giant Stores, Giant Eagle, King Kullen, Food Town, Kroger, Safeway, Albertsons, Lowes, Nash Finch, Spartan Stores, Shoppers, Marsh's Supermarkets, 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, 2016 and other filings made by the Company with the Securities and Exchange Commission

   
MamaMancini's Holdings, Inc.  
Consolidated Balance Sheets  
   
    January 31,     January 31,  
    2016     2015  
Assets            
                 
Assets:                
Cash   $ 587,422     $ 854,995  
Accounts receivable, net     1,476,582       2,233,211  
Inventories     252,752       301,170  
Prepaid expenses     154,458       107,242  
Due from manufacturer - related party     2,248,781       2,213,037  
Total current assets     4,719,995       5,709,655  
                 
Property and equipment, net     1,047,455       1,124,745  
                 
Debt issuance costs, net     26,620       101,197  
Total Assets   $ 5,794,070     $ 6,935,597  
                 
Liabilities and Stockholders' Equity (Deficit)                
                 
Liabilities:                
Accounts payable and accrued expenses   $ 769,551     $ 1,216,436  
Line of credit     959,621       1,409,098  
Term loan     120,000       120,000  
Promissory notes     266,808       -  
Notes payable - related party     125,000       -  
Convertible note payable - net of debt discount     2,540,000       -  
Total current liabilities     4,780,980       2,745,534  
                 
Term loan - net of current     320,000       440,000  
Promissory notes - net of current portion     69,767       -  
Convertible note payable - net of current portion and debt discount     -       1,587,447  
Total long-term liabilities     389,767       2,027,447  
                 
Total Liabilities     5,170,747       4,772,981  
                 
Commitments and contingencies                
                 
Stockholders' Equity (Deficit)                
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; 26,507,516 and 26,047,376 shares issued and outstanding, respectively     265       260  
Additional paid in capital     14,954,928       12,766,116  
Common stock subscribed, $0.00001 par value; 66,667 and 66,667 shares, respectively     1       1  
Accumulated deficit     (14,182,371 )     (10,603,761 )
                 
Less: Treasury stock, 230,000 and 0 shares, respectively     (149,500 )     -  
Total Stockholders' Equity (Deficit)     623,323       2,162,616  
                 
Total Liabilities and Stockholders' Equity (Deficit)   $ 5,794,070     $ 6,935,597  
                 
                 
   
MamaMancini's Holdings, Inc.  
Consolidated Statements of Operations  
             
    For the Year Ended  
    January 31, 2016     January 31, 2015  
                 
                 
Sales - net of slotting fees and discounts   $ 12,603,447     $ 12,010,268  
                 
Cost of sales     9,006,220       8,803,540  
                 
Gross profit     3,597,227       3,206,728  
                 
Operating expenses                
  Research and development     107,632       100,864  
  General and administrative expenses     5,748,912       6,856,054  
    Total operating expenses     5,856,544       6,956,918  
                 
Loss from operations     (2,259,317 )     (3,750,190 )
                 
Other expenses                
  Interest expense     (555,071 )     (163,136 )
  Amortization of debt discount     (261,670 )     (46,197 )
  Amortization of closing costs     (55,471 )     (100,953 )
  Loss on debt extinguishment     (380,089 )     -  
    Total other expenses     (1,252,301 )     (310,286 )
                 
Net loss     (3,511,618 )     (4,060,476 )
                 
Less: preferred dividends     (66,992 )     -  
                 
Net loss available to common stockholders   $ (3,578,610 )   $ (4,060,476 )
                 
Net loss per common share - basic and diluted   $ (0.14 )   $ (0.16 )
                 
Weighted average common shares outstanding                
  -basic and diluted     26,147,913       25,487,778  
                   
                 
   
MamaMancini's Holdings, Inc.  
Consolidated Statements of Cash Flows  
             
    For the Year Ended  
    January 31, 2016     January 31, 2015  
                 
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (3,511,618 )   $ (4,060,476 )
  Adjustments to reconcile net loss to net cash used in operating activities:                
    Depreciation     285,516       170,113  
    Amortization of debt issuance costs     55,471       100,953  
    Amortization of debt discount     261,670       46,197  
    Amortization of deferred offering costs     10,021       -  
    Share-based compensation     245,547       266,362  
    Loss on extinguishment of debt     380,089       -  
Changes in operating assets and liabilities:                
  (Increase) Decrease in:                
    Accounts receivable     756,629       (1,203,579 )
    Inventories     48,418       (141,341 )
    Prepaid expenses     (47,216 )     33,269  
    Due from manufacturer - related party     (35,744 )     (840,001 )
Increase (Decrease) in:                
  Accounts payable and accrued expenses     290,958       621,139  
    Net Cash Used In Operating Activities     (1,260,259 )     (5,007,364 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Cash paid for fixed assets     (208,226 )     (316,831 )
    Net Cash Used In Investing Activities     (208,226 )     (316,831 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from issuance of preferred stock     1,580,000       -  
Proceeds from issuance of common stock     -       1,180,003  
Proceeds from common stock subscribed     -       100,000  
Stock issuance costs     (436,330 )     (174,211 )
Deferred offering costs     (10,021 )        
Proceeds from demand notes     650,000       -  
Proceeds from notes payable - related party     125,000       -  
Debt issuance costs     -       (214,636 )
Borrowings (repayment) of line of credit, net     (449,477 )     1,186,394  
Borrowings from term loan     -       600,000  
Repayment of term loan     (120,000 )     (40,000 )
Repayment of promissory notes     (138,260 )     -  
Borrowings from convertible note     -       2,000,000  
    Net Cash Provided By Financing Activities     1,200,912       4,637,550  
                 
Net Decrease in Cash     (267,573 )     (686,645 )
                 
Cash - Beginning of Period     854,995       1,541,640  
                 
Cash - End of Period   $ 587,422     $ 854,995  
                 
SUPPLEMENTARY CASH FLOW INFORMATION:                
Cash Paid During the Period for:                
  Income taxes   $ -     $ -  
  Interest   $ 488,682     $ 132,803  
                 
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                
                 
Stock issuance costs paid in the form of warrants   $ 241,769     $ 171,981  
Conversion of demand notes to preferred stock   $ 650,000     $ -  
Stock issued for debt discount on convertible note   $ 39,600     $ 400,000  
Accrued dividends   $ 66,992     $ -  
Purchase of common stock issued for amendment of convertible note   $ 149,500     $ -  
Accrued interest reclassified to principal balance of convertible note   $ 220,000     $ -  
Promissory note issued for accounts payable   $ 474,835     $ -  
Preferred A and warrants issued for accounts payable   $ 110,000     $ -  
                 
                 

Contact Information

  • Contact:

    Carl Wolf
    Chairman and CEO
    MamaMancini's Holdings, Inc.
    Stock Symbol: MMMB
    973-985-0280