Third Quarter Net Income Grew 80% Year-Over-Year to $0.7 Million; Debt Reduced by 84% Year-to-Date
EAST RUTHERFORD, NJ, Dec. 14, 2020 (GLOBE NEWSWIRE) -- MamaMancini's Holdings, Inc. (OTCQB: MMMB), a marketer of specialty pre-prepared, frozen and refrigerated food products, has reported its financial results for the third quarter ended October 31, 2020.
Fiscal 2021 Financial Summary:
| Three Months Ended October 31, | Year-over-Year % Change | |||||||||||
| 2020 | 2019 | |||||||||||
| Revenues | $ | 9.9 million | $ | 9.3 million | 6.8 | % | ||||||
| Gross Profit | $ | 3.1 million | $ | 2.9 million | 7.9 | % | ||||||
| Operating Expenses | $ | 2.3 million | $ | 2.4 million | -2.5 | % | ||||||
| Net Income | $ | 0.7 million | $ | 0.4 million | 78 | % | ||||||
| Earnings per Share | $ | 0.02 | $ | 0.01 | 100 | % | ||||||
| As of October 31, 2020 | As of January 31, 2020 | |||||||||||
| Cash & Equivalents | $ | 1.8 million | $ | 0.4 million | 356 | % | ||||||
| Working Capital | $ | 3.5 million | $ | 1.4 million | 148 | % | ||||||
| Debt | $ | 0.7 million | $ | 4.1 million | -84 | % | ||||||
| Stockholder’s Equity | $ | 5.6 million | $ | 0.4 million | 1300 | % | ||||||
Third Quarter Fiscal 2021 & Subsequent Highlights:
- Engaged B. Riley Securities, a full-service investment bank, to assist in the exploration and evaluation of strategic alternatives for enhancing shareholder value. These alternatives could include, among others, a sale of the company, a strategic business acquisition, continued execution of the Company’s business plan or some combination of one or more of these possible alternatives.
- Announced new customer authorizations since August 2020, both in terms of new locations and expansion of existing placements, at several major nationwide retailers including 1,250 Publix Super Markets in the Southeast, 167 Tops Friendly Markets in the Northeast, 175 Gordon Food Service Marketplace locations across the Midwest, Lipari Foods, a major distributor in Michigan, a cycle rotation at 1,500 select Walmart locations nationwide, 159 The Fresh Market locations nationwide, 189 Hannaford Foods locations in the Northwest, 170 Weis Supermarkets in the Mid-Atlantic and 550 Winn Dixie/Bi-lo/Harvery’s locations in the Southeast.
- Engaged B&A Food Brokers (B&A), one of the largest independent food brokers, for food service sales solicitation in the Mid-Atlantic region of the United States, as well as with strategic national accounts throughout the country.
- QVC customers voted MamaMancini’s products as #1 in Best Meatball, Best Plant Based Food and Best Condiment, Spice or Sauce categories during the 2020 QVC Customer Choice® Food Awards. MamaMancini's co-founder Dan Mancini accepted the award on behalf of the Company and featured the award-winning products during the awards show which aired on September 16, 2020.
- Attended multiple virtual investor conferences including the Benzinga Global Small Cap Conference on December 9th, the Virtual Fall Investor Summit on November 17th, the Virtual MicroCap Leadership Summit on September 25th and the LD 500 Virtual Conference on September 2nd.
Management Commentary
“I am proud of the operational progress our team made in the third quarter, realizing strong year-over-year growth amidst the backdrop of COVID-19,” said Carl Wolf, Chairman and Chief Executive Officer of MamaMancini’s. “We continue to grow the breadth and depth of our product distribution footprint at retail storefronts nationwide, a testament to the quality of our products that keep customers coming back for more, time and again – the same qualities that drove our recognition at the 2020 QVC Customer Choice Food Awards.
“Our strong financial results year-to-date are due to the aforementioned sales growth, itself driven by our successful advertising efforts, as well as the operational efficiencies that we have been able to realize as we scale – improving processes on the factory floor to boost output and lower incremental costs wherever possible. We expect that these efficiencies will be seen in the gross margin profile of future quarters, particularly as beef prices return to normal.
“As we move towards the conclusion of 2020 and into 2021, various positive potential outcomes await MamaMancini’s – from the realization of strategic alternatives, to a potential uplisting and continued growth in new product placements with the abatement of headwinds related to the COVID-19 pandemic, we are primed for another record-breaking year. I look forward to continuing these efforts as we work to create sustainable, long-term value for our shareholders,” concluded Wolf.
Third Quarter Fiscal 2021 Financial Results
Revenue in the third quarter of 2021 increased to a third quarter record of $9.9 million, compared to $9.3 million in the same year-ago quarter. Revenue year-to-date increased 27% to a record $31.4 million, compared to $24.7 million in the same year-ago period. Revenue growth was primarily a result of increased sales to new and existing customers, partially offset by COVID-19 effects which slowed some new placements in the third quarter and are expected to resume in the fourth quarter.
Gross profit increased to $3.1 million in the third quarter of 2021, or 32% of total revenues, compared to $2.9 million, or 31% of total revenues, in the same year-ago quarter. Gross profit year-to-date increased to $10.1 million, or 32% of total revenues, compared to $8.0 million, or 32% of total revenues, in the same year-ago period. Gross margin increased primarily as a result of ongoing efforts to improve plant operating efficiencies, partially offset by the temporary negative impact of higher beef pricing due to the COVID-19 pandemic.
Operating expenses decreased to $2.3 million in the third quarter of 2021, compared to $2.4 million in the same year-ago quarter. Operating expenses year-to-date increased by 15% to $7.5 million as compared to the same year-ago period. As a percentage of sales, operating expenses in the third quarter and year-to-date decreased from 26% to 24%. Operating expenses decreased primarily due to lower promotional expenses for product merchandising.
Net income for the third quarter of 2021 grew significantly to $0.7 million, or $0.02 per share, as compared to a net income of $0.4 million, or $0.01 per share, in the same year-ago quarter. Net income year-to-date totaled $2.4 million, as compared to $1.1 million in the same year-ago period. The increase in net income was primarily attributable to an increase in sales, reduction of operating expenses as a percentage of sales and a decrease in interest expense.
Cash and cash equivalents as of October 31, 2020 was $1.8 million, as compared to $0.4 million at January 31, 2020. The increased cash balance as of October 31, 2020 benefitted from $2.5 million in cash flow from operations fiscal year-to-date, partially offset by a paydown of debt, as the Company reduced its debt by 84% fiscal year-to-date, as well as redemption of warrants outstanding.
Conference Call
Management will host an investor conference call at 4:30 p.m. Eastern time today, Monday, December 14, 2020 to discuss the Company’s third quarter 2021 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:
Q3 2021 Earnings Conference Call
Date: Monday, December 14, 2020
Time: 4:30 p.m. Eastern time
U.S. Dial-in: 1-844-889-4326
International Dial-in: 1-412-317-9264
Conference ID: 10150310
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, 2020. 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 10150310.
About MamaMancini’s Holdings, Inc.
MamaMancini's Holdings, Inc. (OTCQB: 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 Sams 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, 2019 and other filings made by the Company with the Securities and Exchange Commission.
Investor Relations Contact:
Lucas A. Zimmerman
Senior Vice President
MZ Group - MZ North America
(949) 259-4987
MMMB@mzgroup.us
www.mzgroup.us
MamaMancini’s Holdings, Inc.
Condensed Consolidated Balance Sheets
| October 31, 2020 | January 31, 2020 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 1,792,843 | $ | 393,683 | ||||
| Accounts receivable, net | 3,687,912 | 3,727,887 | ||||||
| Inventories | 1,560,287 | 1,246,417 | ||||||
| Prepaid expenses | 291,052 | 252,268 | ||||||
| Total current assets | 7,332,094 | 5,620,255 | ||||||
| Property and equipment, net | 3,022,169 | 2,805,843 | ||||||
| Intangibles | 87,639 | - | ||||||
| Operating lease right of use assets, net | 1,387,851 | 1,490,794 | ||||||
| Deposits | 20,177 | 20,177 | ||||||
| Total Assets | $ | 11,849,930 | $ | 9,937,069 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Liabilities: | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 3,513,121 | $ | 3,552,790 | ||||
| Term loan | - | 423,799 | ||||||
| Operating lease liability | 142,286 | 126,516 | ||||||
| Finance leases payable | 182,428 | 105,126 | ||||||
| Total current liabilities | 3,837,835 | 4,208,231 | ||||||
| Line of credit – net | 650,000 | 2,997,348 | ||||||
| Operating lease liability – net | 1,256,832 | 1,372,349 | ||||||
| Finance leases payable – net | 528,757 | 315,234 | ||||||
| Notes payable - related party | - | 641,844 | ||||||
| Total long-term liabilities | 2,435,589 | 5,326,775 | ||||||
| Total Liabilities | 6,273,424 | 9,535,006 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity: | ||||||||
| Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of October 31, 2020 and January 31, 2020, 0 and 0 shares outstanding as of October 31, 2020 and January 31, 2020 | - | - | ||||||
| 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; 34,767,841 and 31,991,241 shares issued and outstanding as of October 31, 2020 and January 31, 2020 | 348 | 321 | ||||||
| Additional paid in capital | 19,489,657 | 16,695,352 | ||||||
| Accumulated deficit | (13,763,999 | ) | (16,144,110 | ) | ||||
| Less: Treasury stock, 230,000 shares at cost, respectively | (149,500 | ) | (149,500 | ) | ||||
| Total Stockholders’ Equity | 5,576,506 | 402,063 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 11,849,930 | $ | 9,937,069 | ||||
MamaMancini’s Holdings, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
| For the Three Months Ended October 31, | For the Nine Months Ended October 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Sales-net of slotting fees and discounts | $ | 9,898,991 | $ | 9,267,036 | $ | 31,384,394 | $ | 24,731,305 | ||||||||
| Costs of sales | 6,773,662 | 6,366,084 | 21,317,384 | 16,767,903 | ||||||||||||
| Gross profit | 3,125,329 | 2,900,952 | 10,067,010 | 7,963,402 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 30,765 | 32,744 | 86,103 | 82,579 | ||||||||||||
| General and administrative | 2,307,436 | 2,364,608 | 7,411,060 | 6,446,715 | ||||||||||||
| Total operating expenses | 2,338,201 | 2,397,352 | 7,497,163 | 6,529,294 | ||||||||||||
| Income from operations | 787,128 | 503,600 | 2,569,847 | 1,434,108 | ||||||||||||
| Other expenses | ||||||||||||||||
| Interest | (45,822 | ) | (89,635 | ) | (171,872 | ) | (293,531 | ) | ||||||||
| Amortization of debt discount | (7,164 | ) | (5,350 | ) | (17,864 | ) | (17,988 | ) | ||||||||
| Total other expenses | (52,986 | ) | (94,985 | ) | (189,736 | ) | (311,519 | ) | ||||||||
| Net income before income tax provision | 734,142 | 408,615 | 2,380,111 | 1,122,589 | ||||||||||||
| Income tax provision | - | - | - | - | ||||||||||||
| Net income | $ | 734,142 | $ | 408,615 | $ | 2,380,111 | $ | 1,122,589 | ||||||||
| Net income per common share | ||||||||||||||||
| – basic | $ | 0.02 | $ | 0.01 | $ | 0.07 | $ | 0.04 | ||||||||
| – diluted | $ | 0.02 | $ | 0.01 | $ | 0.07 | $ | 0.04 | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| – basic | 34,225,446 | 31,991,241 | 32,832,450 | 31,935,837 | ||||||||||||
| – diluted | 35,725,984 | 32,091,210 | 34,322,988 | 32,035,806 | ||||||||||||
MamaMancini’s Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| For the Nine Months Ended | ||||||||
| October 31, 2020 | October 31, 2019 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 2,380,111 | $ | 1,122,589 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 489,109 | 495,005 | ||||||
| Amortization of debt discount | 17,864 | 17,988 | ||||||
| Share-based compensation | 51,435 | 67,857 | ||||||
| Amortization of right of use assets | 102,943 | 75,747 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 39,975 | (599,207 | ) | |||||
| Other receivable | - | (163,983 | ) | |||||
| Inventories | (313,870 | ) | (254,924 | ) | ||||
| Prepaid expenses | (38,784 | ) | (138,098 | ) | ||||
| Accounts payable and accrued expenses | (111,024 | ) | 422,971 | |||||
| Operating lease liability | (99,747 | ) | (70,097 | ) | ||||
| Net Cash Provided by Operating Activities | 2,518,012 | 975,848 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Cash paid for fixed assets | (304,048 | ) | (163,186 | ) | ||||
| Cash paid for intangible assets | (16,284 | ) | - | |||||
| Net Cash Used in Investing Activities | (320,332 | ) | (163,186 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Repayment of related party notes payable | (641,844 | ) | - | |||||
| Proceeds from term loan | - | 41,917 | ||||||
| Repayments of term loan | (441,663 | ) | (1,075,253 | ) | ||||
| Proceeds from promissory note | 330,505 | - | ||||||
| Repayment of promissory note | (330,505 | ) | - | |||||
| Borrowings (repayments) of line of credit, net | (2,347,348 | ) | 285,314 | |||||
| Repayment of capital lease obligations | (110,562 | ) | (63,475 | ) | ||||
| Proceeds from exercise of options | 7,200 | - | ||||||
| Proceeds from exercise of warrants | 2,735,697 | - | ||||||
| Net Cash Used in Financing Activities | (798,520 | ) | (811,497 | ) | ||||
| Net Increase in Cash | 1,399,160 | 1,165 | ||||||
| Cash - Beginning of Period | 393,683 | 609,409 | ||||||
| Cash - End of Period | $ | 1,792,843 | $ | 610,574 | ||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||
| Cash Paid During the Period for: | ||||||||
| Income taxes | $ | - | $ | - | ||||
| Interest | $ | 174,735 | $ | 363,519 | ||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Operating lease liability | $ | - | $ | 1,599,830 | ||||
| Finance lease asset additions | $ | 401,387 | $ | 293,479 | ||||
| Common stock issued for services to be rendered | $ | - | $ | 71,875 | ||||
| Acquisition of software via contract liability | $ | 71,355 | $ | - | ||||