SOURCE: MamaMancini's Holdings, Inc.

MamaMancini's Holdings, Inc.

September 13, 2016 10:58 ET

MamaMancini's Reports Second Quarter Fiscal Year 2017 Financial Results

Second Quarter Revenue up 51%; Gross Margin up to 33% vs 24%; *Cash EBITDA of $147,000 Improves $838,000 Over Prior Year

EAST RUTHERFORD, NJ--(Marketwired - Sep 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 second quarter of fiscal year 2017, ended July 31, 2016.

Fiscal Second Quarter Highlights:

  • Second quarter 2017 revenue increased 51% to $4.1 million compared to second quarter 2016 revenue of $2.7 million.
  • Second quarter 2017 gross margin increased substantially to 33% compared to 24% in the second quarter of fiscal 2016. Gross margin for full year fiscal 2017 expected to be approximately 35%.
  • Total operating expenses for the second quarter increased four percent versus the comparable quarter of fiscal 2016 as the Company increased R&D spending for development of future new products and freight increased with more volume. As a percentage of sales operating expenses decreased from 51.5% to 35.7% of net sales.
  • Loss from Operations for the second quarter fiscal 2017 improved 86% to $(109,167) versus $(762,936) in the prior year second quarter.
  • Net loss for second quarter fiscal 2017 improved 72% to $(276,810) compared to $(1.0 million) in the second quarter of fiscal 2016. EPS for second quarter fiscal 2017 was $(0.01) compared to $(0.04) in second quarter fiscal 2016.
  • Placements on grocer's shelves increased from approximately 35,000 to 36,000 from first quarter to second quarter of this year. Sales volume per items on the shelf increased by approximately 59% versus the second quarter of 2016.
  • *Cash EBITDA, a non-GAAP financial metric, for the second quarter of fiscal 2017 was positive $147,000 compared with negative $(692,000) in the second fiscal quarter of 2016.

Carl Wolf, Chief Executive Officer of MamaMancini's, commented, "The second quarter of fiscal year 2017 was very strong. Revenue increased 51% and 32% for the second quarter and the first half of fiscal year 2017, respectively. The new retail store customers added during the latter months of fiscal 2016 and the first two quarters of fiscal 2017 are driving solid double-digit revenue increases. Our strategy of developing larger customers and exiting underperforming accounts that do not generate reasonable returns is achieving improving operating results.

As a result of our, now, more sustainable account base, gross margin for the quarter improved to 33% from 24% in last year's comparable quarter. Our operating loss for the second quarter improved by 86% as we continue to develop new retail store accounts, drive revenue and operate on a more efficient basis. We are very pleased with the results of the second quarter and the first half of the fiscal year."

"We continue to grow our presence on the perimeter of the retail grocery store, where fresh, minimally or non-processed, healthy foods are offered," continued Mr. Wolf. "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. This outer band of the retail grocery store, on an industry-wide basis, 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. Our products fit perfectly with the evolving everyday life of millions of Americans."

Second Quarter 2017 Results
Sales, net of slotting fees and discounts, were $4.1 million for the second quarter of fiscal 2017, a 51% increase compared to $2.7 million reported in the second quarter of 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. As of July 31, 2016, the Company's products were sold in approximately 11,600 stores, with an average of 3.1 product SKUs in each store, aggregating to approximately 36,000 retail and grocery shelf placements throughout the U.S. That compares with approximately 38,000 shelf placements as of July 31, 2015. The company's sales per store increased 59% over prior year.

Gross profit for the second quarter of fiscal 2017 was $1.4 million, or 33% of sales, compared to $648,168, or 24% of sales, in the year ago period. The increase in gross margin is primarily attributed to increased revenue during the second 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 loss for the second quarter of fiscal 2017 was ($277,000), or ($0.01) per basic and diluted share, compared to a net loss of $(1.0 million), or ($0.04) per basic and diluted share, in the second quarter of fiscal 2016.

Six-Months Fiscal 2017 Results
Sales, net of slotting fees and discounts, were $8.1 million for the first half of fiscal 2017, a 32% increase compared to $6.1 million reported in the first six months of 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 the first six months of fiscal 2017 was $ 2.8 million, or 35% of sales, compared to $1.6 million, or 26% 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 the first six months of fiscal 2017 was ($614,000), or ($0.02) per basic and diluted share, compared to a net loss of $(2.1 million), or ($0.08) per basic and diluted share, in the first six months of fiscal 2016.

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

Conference Call
The Company has scheduled a conference call for Wednesday, September 14, 2016, at 10:00 am ET to review the results.

Interested parties may participate on the conference call by dialing (877) 317-6789 or (412) 317-6789. A replay of the conference call will be available by dialing (877) 344-7529 or (412) 317-0088, confirmation code 10092323, through September 27, 2016.

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, Jewel, 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  
   
    July 31,     January 31,  
    2016     2016  
    (unaudited)        
Assets  
                 
Assets:                
Cash   $ 264,446     $ 587,422  
Accounts receivable, net     1,360,243       1,476,582  
Inventories     407,978       252,752  
Prepaid expenses     226,474       154,458  
Due from manufacturer - related party     2,180,863       2,248,781  
Total current assets     4,440,004       4,719,995  
                 
Property and equipment, net     1,091,835       1,047,455  
Total Assets   $ 5,531,839     $ 5,767,450  
                 
Liabilities and Stockholders' Equity  
                 
Liabilities:                
Accounts payable and accrued expenses   $ 395,950     $ 769,551  
Line of credit, net     -       933,001  
Term loan     120,000       120,000  
Promissory notes     156,275       266,808  
Notes payable - related party     -       125,000  
Convertible note payable     270,000       2,540,000  
Total current liabilities     942,225       4,754,360  
                 
Term loan - net of current     260,000       320,000  
Line of credit - net of current portion     1,096,630       -  
Promissory notes - net of current portion     -       69,767  
Convertible note payable - net of current portion     2,540,323       -  
Notes payable - related party     125,000       -  
Total long-term liabilities     4,021,953       389,767  
                 
Total Liabilities     4,964,178       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; 27,245,334 and 26,507,516 shares issued and outstanding, respectively     272       265  
Additional paid in capital     15,513,497       14,954,928  
Common stock subscribed, $0.00001 par value; 66,667 shares, respectively     1       1  
Accumulated deficit     (14,796,609 )     (14,182,371 )
                 
Less: Treasury stock, 230,000 shares, respectively     (149,500 )     (149,500 )
Total Stockholders' Equity     567,661       623,323  
                 
Total Liabilities and Stockholders' Equity   $ 5,531,839     $ 5,767,450  
                 
                 
   
MamaMancini's Holdings, Inc.  
Condensed Consolidated Statements of Operations  
                         
    For the Three Months Ended     For the Six Months Ended  
    July 31, 2016     July 31, 2015     July 31, 2016     July 31, 2015  
                                 
                                 
Sales - net of slotting fees and discounts   $ 4,138,280     $ 2,739,200     $ 8,062,257     $ 6,092,479  
                                 
Cost of sales     2,772,966       2,091,032       5,221,744       4,499,331  
                                 
Gross profit     1,365,314       648,168       2,840,513       1,593,148  
                                 
Operating expenses                                
  Research and development     37,225       20,479       67,787       43,558  
  General and administrative expenses     1,437,256       1,390,625       2,937,113       3,173,746  
    Total operating expenses     1,474,481       1,411,104       3,004,900       3,217,304  
                                 
Loss from operations     (109,167 )     (762,936 )     (164,387 )     (1,624,156 )
                                 
Other expenses                                
  Interest expense     (157,949 )     (124,705 )     (319,711 )     (248,062 )
  Amortization of debt discount     (9,694 )     (83,437 )     (18,819 )     (182,270 )
  Amortization of closing costs     -       (29,228 )     -       (40,374 )
    Total other expenses     (167,643 )     (237,370 )     (338,530 )     (470,706 )
                                 
Net loss     (276,810 )     (1,000,306 )     (502,917 )     (2,094,862 )
                                 
Less: preferred dividends     (46,800 )     (10,959 )     (111,321 )     (10,959 )
                                 
Net loss available to common stockholders   $ (323,610 )   $ (1,011,265 )   $ (614,238 )   $ (2,105,821 )
                                 
Net loss per common share - basic and diluted   $ (0.01 )   $ (0.04 )   $ (0.02 )   $ (0.08 )
                                 
Weighted average common shares outstanding -basic and diluted     27,039,199       26,085,916       26,776,279       26,071,767  
                                 
   
MamaMancini's Holdings, Inc.  
Condensed Consolidated Statements of Cash Flows  
             
    For the Six Months Ended  
    July 31, 2016     July 31, 2015  
                 
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (502,917 )   $ (2,094,862 )
    Adjustments to reconcile net loss to net cash used in operating activities:                
      Depreciation     159,703       137,585  
      Amortization of debt discount     18,819       222,644  
      Share-based compensation     352,137       3,055  
Changes in operating assets and liabilities:                
  (Increase) Decrease in:                
    Accounts receivable     116,339       1,016,864  
    Inventories     (155,226 )     (29,089 )
    Prepaid expenses     (43,891 )     (21,649 )
    Due from manufacturer - related party     67,918       10,910  
  Increase (Decrease) in:                
    Accounts payable and accrued expenses     (36,285 )     (58,222 )
    Liabilities to be settled in stock     -       49,347  
      Net Cash Used In Operating Activities     (23,403 )     (763,417 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Cash paid for fixed assets     (204,083 )     (100,683 )
      Net Cash Used In Investing Activities     (204,083 )     (100,683 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from issuance of preferred stock     -       350,000  
Stock issuance costs     -       (150,811 )
Deferred offering costs     -       (19,021 )
Proceeds from demand notes     -       650,000  
Debt issuance costs     -       (6,191 )
Borrowings (repayments) of line of credit, net     144,810       (357,936 )
Repayment of term loan     (60,000 )     (60,000 )
Repayment of promissory notes     (180,300 )     -  
      Net Cash (Used In) Provided By Financing Activities     (95,490 )     406,041  
                 
Net Decrease in Cash     (322,976 )     (458,059 )
                 
Cash - Beginning of Period     587,422       854,995  
                 
Cash - End of Period   $ 264,446     $ 396,936  
                 
SUPPLEMENTARY CASH FLOW INFORMATION:                
Cash Paid During the Period for:                
  Income taxes   $ -     $ -  
  Interest   $ 76,311     $ 223,062  
                 
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                
                 
Stock issuance costs paid in the form of warrants   $ -     $ 76,608  
Conversion of demand notes to preferred stock   $ -     $ 650,000  
Stock issued for debt discount on convertible note   $ -     $ 39,600  
Accrued dividends   $ -     $ 10,959  
Stock issued for Series A Preferred dividends   $ 178,314     $ -  
Prepaid stock-based compensation   $ 28,125     $ -  
Accrued interest reclassified to principal balance of convertible note   $ 270,323     $ -  
                 

Contact Information

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