Sales Increased 22% to $2.7 Million; Cash Flow From Operations Improved $754,000 From Prior Year
EAST RUTHERFORD, NJ--(Marketwired - Sep 14, 2015) - MamaMancini's Holdings, Inc. (the "Company" or "MamaMancini's") (
Business and Financial Highlights
Carl Wolf, Chief Executive Officer of MamaMancini's, commented, "Our solid, double-digit revenue growth is the direct result of our efforts to add new accounts, expand our product line and grow our average revenue per client by increasing the number of locations we serve. At the same time, our improved brand recognition is enabling us to shift to a more selective approach, focusing efforts on accounts with higher growth potential and higher margins and terminating certain lower margin agreements. Our recent launch with QVC, the introduction of our Jumbo Meatball at Costco warehouses, and entrance into the prepared food sections of retailers and food service accounts are helping expand our reach into larger markets."
Mr. Wolf added, "We are executing on our growth strategy and pruning our portfolio of underperforming accounts in order to efficiently increase our operating cash flow. By focusing on high-quality accounts such as QVC we are positioning the company for improving financial results."
Summary Financial Results
Sales, net of slotting fees and discounts, were $2.7 million for the fiscal quarter ended July 31, 2015, an increase of 22% from $2.2 million for the fiscal quarter ended July 31, 2014. The increase in sales is primarily related to the Company's execution of its expansion strategy. The Company has sold into approximately 10,500 retail and grocery locations as of July 31, 2015, compared to approximately 8,600 locations at July 31, 2014.
Gross profit was $648,000, or 23.7% of sales for the three months ended July 31, 2015 compared to $659,000, or 29.3% of sales in the year ago period. Gross profit for 2015 includes charges for changeover to new product sizes and disposition of obsolete inventory and under utilization of production facilities. The summer season is a lower demand period for prepared meatballs and The Company elected to work inventories lower as well. Gross Profit adjusted for the charges described in this paragraph would have been 31%. The Company expects that plant utilization and gross profit will run at higher rates for the rest of the fiscal year.
Net loss for the fiscal quarter ended July 31, 2015 was $(1,011,000), or $(0.04) per basic and diluted share, compared to a net loss of $(793,000), or $(0.03) per basic and diluted share, in the prior year. The change in net loss was mainly attributable to a $57,000 one-time legal charge for non-operating financing activities, and an increase in non-operating expenses of $211,000, consisting of debt fees, debt discount amortization and interest expense to support the Company's growth efforts. Please refer to the Company's 10Q for the quarter ending July 31, 2015, which was filed on September 14, 2015, for more detailed information on the Company's balance sheet, operations and cash flow.
Cash Used in Operating Activities for the three months ended July 31, 2015 was ($427,000) compared to ($1.18) million in the prior year period, an improvement of $754,000. This includes cash expenses of $245,000 related to inventory write-downs, under utilized production facilities, liquidation sales and promotions related to the transition to new packaging and termination of underperforming accounts, and one time legal fees in relations to non-operating financing activities.
Since August 31, 2015 through September 11, 2015, the Company completed the closing of an additional $185,000 of its private placement offering of convertible preferred stock.
Conference Call
The Company will hold its quarterly earnings call on September 16, 2015 at 8:30a.m. ET. Interested parties may participate in the call by dialing 1-877-407-9124 (domestic) or 1-201-689-8584 (international) 5-10 minutes prior to the start time. The conference call will be available for replay starting at 12 p.m. EDT on September 16, 2015 and ending on October 16, 2015 at 11:59 p.m. EDT. For the replay, please dial 1-877-660-6853 (domestic) or 1-201-612-7415 (international) and use access code 13611395
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, A&P, Waldbaums, Food Emporium, 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, Food Town, Kroger, Winn Dixie Shoppers, Marsh's Supermarkets, Bi-Lo, Central Markets, Weis Markets, Ingles, and The Fresh Market.
Financial Tables Follow | ||||||||
MamaMancini's Holdings, Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
July 31, | January 31, | |||||||
2015 | 2015 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Assets: | ||||||||
Cash | $ | 396,936 | $ | 854,995 | ||||
Accounts receivable, net | 1,216,347 | 2,233,211 | ||||||
Inventories | 330,259 | 301,170 | ||||||
Prepaid expenses | 128,891 | 107,242 | ||||||
Due from manufacturer - related party | 2,202,127 | 2,213,037 | ||||||
Deferred offering costs | 19,021 | - | ||||||
Total current assets | 4,293,581 | 5,709,655 | ||||||
Property and equipment, net | 1,087,843 | 1,124,745 | ||||||
Debt issuance costs, net | 67,014 | 101,197 | ||||||
Total Assets | $ | 5,448,438 | $ | 6,935,597 | ||||
Liabilities and Stockholders' Equity | ||||||||
Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 1,169,173 | $ | 1,216,436 | ||||
Liabilities to be settled in stock | 49,347 | - | ||||||
Line of credit | 1,051,162 | 1,409,098 | ||||||
Term loan | 120,000 | 120,000 | ||||||
Convertible note payable - net of debt discount | 1,730,117 | - | ||||||
Total current liabilities | 4,119,799 | 2,745,534 | ||||||
Term loan - net of current | 380,000 | 440,000 | ||||||
Convertible note payable - net of current portion and debt discount | - | 1,587,447 | ||||||
Total long-term liabilities | 380,000 | 2,027,447 | ||||||
Total Liabilities | 4,499,799 | 4,772,981 | ||||||
Commitments and contingencies | ||||||||
Stockholders' Equity | ||||||||
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 10,000 and 0 shares issued and outstanding, respectively | - |
- |
||||||
Preferred stock, $0.00001 par value; 20,000,000 shares authorized; no shares issued and outstanding | - |
- |
||||||
Common stock, $0.00001 par value; 250,000,000 shares authorized; 26,085,916 and 26,047,376 shares issued and outstanding, respectively | 260 |
260 |
||||||
Additional paid in capital | 13,657,960 | 12,766,116 | ||||||
Common stock subscribed, $0.00001 par value; 66,667 and 66,667 shares, respectively | 1 | 1 | ||||||
Accumulated deficit | (12,709,582 | ) | (10,603,761 | ) | ||||
Total Stockholders' Equity | 948,639 | 2,162,616 | ||||||
Total Liabilities and Stockholders' Equity | $ | 5,448,438 | $ | 6,935,597 | ||||
MamaMancini's Holdings, Inc. | ||||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
July 31, 2015 | July 31, 2014 | July 31, 2015 | July 31, 2014 | |||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
Sales - net of slotting fees and discounts | $ | 2,739,200 | $ | 2,249,768 | $ | 6,092,479 | $ | 4,832,917 | ||||||||||||||
Cost of sales | 2,091,032 | 1,590,904 | 4,499,331 | 3,371,129 | ||||||||||||||||||
Gross profit | 648,168 | 658,864 | 1,593,148 | 1,461,788 | ||||||||||||||||||
Operating expenses | ||||||||||||||||||||||
Research and development | 20,479 | 24,091 | 43,558 | 42,992 | ||||||||||||||||||
General and administrative expenses | 1,390,625 | 1,401,461 | 3,173,746 | 2,869,739 | ||||||||||||||||||
Total operating expenses | 1,411,104 | 1,425,552 | 3,217,304 | 2,912,731 | ||||||||||||||||||
Loss from operations | (762,936 | ) | (766,688 | ) | (1,624,156 | ) | (1,450,943 | ) | ||||||||||||||
Other expenses | ||||||||||||||||||||||
Interest expense | (124,705 | ) | (26,710 | ) | (248,062 | ) | (43,344 | ) | ||||||||||||||
Amortization of debt discount | (83,437 | ) | - | (182,270 | ) | - | ||||||||||||||||
Total other expenses | (237,370 | ) | (26,710 | ) | (470,706 | ) | (43,344 | ) | ||||||||||||||
Net loss | (1,000,306 | ) | (793,398 | ) | (2,094,862 | ) | (1,494,287 | ) | ||||||||||||||
Less: preferred dividends | (10,959 | ) | - | (10,959 | ) | - | ||||||||||||||||
Net loss available to common stockholders | $ | (1,011,265 | ) | $ | (793,398 | ) | $ | (2,105,821 | ) | $ | (1,494,287 | ) | ||||||||||
Net loss per common share - basic and diluted | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.08 | ) | $ | (0.06 | ) | ||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||
-basic and diluted | 26,085,916 | 25,452,943 | 26,071,767 | 25,091,224 | ||||||||||||||||||
MamaMancini's Holdings, Inc. | ||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
For the Six Months Ended | ||||||||||
July 31, 2015 | July 31, 2014 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
Net loss | $ | (2,094,862 | ) | $ | (1,494,287 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
Depreciation | 137,585 | 59,473 | ||||||||
Amortization of debt issuance costs | 40,374 | 8,431 | ||||||||
Amortization of debt discount | 182,270 | - | ||||||||
Share-based compensation | 3,055 | 176,100 | ||||||||
Changes in operating assets and liabilities: | ||||||||||
(Increase) Decrease in: | ||||||||||
Accounts receivable | 1,016,864 | (24,540 | ) | |||||||
Inventories | (29,089 | ) | (309,329 | ) | ||||||
Prepaid expenses | (21,649 | ) | (41,104 | ) | ||||||
Due from manufacturer - related party | 10,910 | (587,368 | ) | |||||||
Increase (Decrease) in: | ||||||||||
Accounts payable and accrued expenses | (58,222 | ) | (177,444 | ) | ||||||
Liabilities to be settled in stock | 49,347 | - | ||||||||
Net Cash Used In Operating Activities | (763,417 | ) | (2,390,068 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
Cash paid for fixed assets | (100,683 | ) | (223,741 | ) | ||||||
Net Cash Used In Investing Activities | (100,683 | ) | (223,741 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
Proceeds from issuance of preferred stock | 350,000 | - | ||||||||
Proceeds from issuance of common stock | - | 1,180,003 | ||||||||
Stock issuance costs | (150,811 | ) | (149,213 | ) | ||||||
Deferred offering costs | (19,021 | ) | - | |||||||
Proceeds from demand notes | 650,000 | - | ||||||||
Proceeds from common stock subscribed | - | 100,000 | ||||||||
Debt issuance costs | (6,191 | ) | (14,484 | ) | ||||||
Borrowings (repayment) of line of credit, net | (357,936 | ) | 70,637 | |||||||
Repayment of term loan | (60,000 | ) | - | |||||||
Net Cash Provided By Financing Activities | 406,041 | 1,186,943 | ||||||||
Net Decrease in Cash | (458,059 | ) | (1,426,866 | ) | ||||||
Cash - Beginning of Period | 854,995 | 1,541,640 | ||||||||
Cash - End of Period | $ | 396,936 | $ | 114,774 | ||||||
SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||||
Cash Paid During the Period for: | ||||||||||
Income taxes | $ | - | $ | - | ||||||
Interest | $ | 223,062 | $ | 43,344 | ||||||
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||
Stock issuance costs paid in the form of warrants | $ | 76,608 | $ | 171,981 | ||||||
Conversion of notes to preferred stock | $ | 650,000 | $ | - | ||||||
Stock issued for debt discount on convertible note | $ | 39,600 | $ | - | ||||||
Accrued dividends | $ | 10,959 | $ | - | ||||||
Contact Information:
Contact:
James Carbonara
Hayden IR
(646)-755-7412
james@haydenir.com
Brett Maas
Hayden IR
(646) 536-7331
brett@haydenir.com