Q2 2020 Revenues Increase 44% to $8.1 Million; Drives Record Net Income of $0.4 Million

EAST RUTHERFORD, NJ, Sept. 12, 2019 (GLOBE NEWSWIRE) -- MamaMancini's Holdings, Inc. (OTCQB: MMMB), a marketer of specialty pre-prepared, frozen and refrigerated all-natural food products, has reported its financial results for the second quarter ended July 31, 2019.

Q2 2020 Financial Highlights:

  • Revenues in the second quarter of 2020 increased 44% to a $8.1 million, compared to $5.6 million in the same prior year quarter
  • Net income in the second quarter of 2020 increased significantly to a $0.4 million, compared to a net loss of $0.2 million in the second quarter of 2019
  • The Company paid down $0.8 million in senior debt in the first six months of fiscal 2020

Management Commentary

“The second quarter of fiscal 2020 was highlighted by continued momentum with revenues and profitability,” said Carl Wolf, Chairman and CEO of MamaMancini’s Holdings, Inc. “The 44% revenue growth to $8.1 million in the second quarter was driven by increased sales with some of our largest customers and new customer placements in over 2,500 retail locations including Publix, Sam’s Club, Albertsons and Tops Markets.

“We continue to see success in our SiriusXM radio advertising campaigns, as evidenced by the launch of our fourth campaign in that platform, which will distribute up to 1,000 commercials on major channels. In addition, our social media efforts continue to maintain a robust reach, engaging customers and encouraging repeat purchases. Our QVC efforts have also seen notable success as well, with Mr. Mancini’s live pitches driving impressive sales.”

“The success of these efforts, when paired with the buildout of our manufacturing capabilities and our initial entry into the incredibly significant food service market, positions us very well for long-term growth and shareholder value creation. We have built a strong foundation from which to close out the year and I look forward to providing our shareholders with operational updates as we move forward,” concluded Wolf.

Second Quarter 2020 Financial Results

Revenue for the second quarter of fiscal 2020 increased 44% to $8.1 million, compared to $5.6 million in the same year-ago quarter. The revenue growth was primarily a result of increased sales with its largest customers, as well as new customer placements. A merchandising event with one customer during the second quarter of 2020 also contributed to the increase in sales.

Gross profit totaled $2.7 million in the second quarter of fiscal 2020, compared to $2.1 million in the same year-ago quarter. Gross profit as a percentage of revenue in the second quarter of fiscal 2020 totaled 33.2%, as compared to 36.5% in the same year-ago quarter, primarily due to a change in product mix; while cost of goods sold for the second quarter of fiscal 2020 included higher depreciation expense in comparison to the prior year comparable period, which negatively impacted gross profit by 2% of sales. As the company grows sales, it expects gross margins to increase as a result of manufacturing plant efficiencies.           

Operating expenses totaled $2.2 million in the second quarter of fiscal 2020, compared to $1.9 million in the same year-ago quarter. Operating expenses decreased as a percentage of sales from 34.2% to 27.6%. Operating expenses increased primarily due to increases in postage and freight, commission expenses and royalty fees due to higher sales.

Net income for the second quarter of fiscal 2020 totaled $0.4 million, or $0.01 per share, as compared to a net loss of $0.2 million, or ($0.01) per share, in the same year-ago quarter. The significant increase in net income was primarily a result of higher sales and gross profit, lower operating costs as a percentage of sales and lower interest and amortization of debt discount expenses.             

Cash and cash equivalents totaled $0.6 million as of July 31, 2019, as compared to $0.3 million as of July 31, 2018. During fiscal 2020, the Company repaid $0.8 million of its senior debt. Cash flow from operations for the six-month period of fiscal 2020 was $0.9 million, compared to $1.4 million in the same year-ago period.

Conference Call

Management will host an investor conference call at 5:00 p.m. Eastern time today, Thursday, September 12, 2019, to discuss the Company’s second quarter 2020 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:

Q2 2020 Conference Call             
Date: Thursday, September 12, 2019      
Time: 5:00 p.m. Eastern time     
U.S. Dial-in: 1-877-270-2148        
International Dial-in: 1-412-902-6510      
Conference ID: 10134583             

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 September 19, 2019. 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 10134583.

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 dinner 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 Walmart, Kroger, Publix, Costco and Albertsons, as well as through national distributors such as Sysco and United Natural Foods. The Company has a major presence on QVC, the largest direct to consumer marketer in the world. 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:
Greg Falesnik
Managing Director
MZ Group - MZ North America
(949) 385-6449
MMMB@mzgroup.us
www.mzgroup.us

MamaMancini’s Holdings, Inc.
Condensed Consolidated Balance Sheets

  July 31, 2019  January 31, 2019 
   (unaudited)     
Assets        
         
Current Assets:        
Cash $635,227  $609,409 
Accounts receivable, net  2,711,332   2,698,562 
Inventories  1,464,924   1,396,400 
Prepaid expenses  379,446   155,178 
Total current assets  5,190,929   4,859,549 
         
Property and equipment, net  2,858,233   2,884,594 
         
Operating lease right of use assets, net  1,556,873   - 
         
Deposits  20,177   20,177 
Total Assets $9,626,212  $7,764,320 
         
Liabilities and Stockholders’ Deficit        
         
Liabilities:        
Current Liabilities:        
Accounts payable and accrued expenses $3,065,435  $3,061,932 
Term loan  500,000   500,000 
Operating lease liability  124,500   - 
Finance leases payable  99,556   53,730 
Total current liabilities  3,789,491   3,615,662 
         
Term loan – net  1,118,704   1,914,401 
Line of credit – net  2,677,348   2,612,034 
Operating lease liability – net  1,432,372   - 
Finance leases payable – net  339,654   162,527 
Notes payable - related party  641,844   641,844 
Total long-term liabilities  6,209,922   5,330,806 
         
Total Liabilities  9,999,413   8,946,468 
         
Commitments and contingencies        
         
Stockholders’ Deficit:        
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of July 31, 2019 and January 31, 2019, 0 and 0 shares outstanding as of July 31, 2019 and January 31, 2019  -   - 
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; 31,991,241 and 31,866,241 shares issued and outstanding as of July 31, 2019 and January 31, 2019  321   320 
Additional paid in capital  16,642,259   16,547,287 
Accumulated deficit  (16,866,281)  (17,580,255)
Less: Treasury stock, 230,000 shares at cost, respectively  (149,500)  (149,500)
Total Stockholders’ Deficit  (373,201)  (1,182,148)
Total Liabilities and Stockholders’ Deficit $9,626,212  $7,764,320 

See accompanying notes to the condensed consolidated financial statements

   

MamaMancini’s Holdings, Inc.
Condensed Consolidated Statements of Operations
(unaudited) 

  For the Three Months Ended
July 31,
  For the Six Months Ended
July 31,
 
  2019  2018  2019  2018 
             
Sales-net of slotting fees and discounts $8,099,445  $5,640,830  $15,464,269  $13,382,824 
                 
Costs of sales  5,408,049   3,578,840   10,401,819   8,492,288 
                 
Gross profit  2,691,396   2,061,990   5,062,450   4,890,536 
                 
Operating expenses:                
Research and development  24,509   37,083   49,835   67,179 
General and administrative  2,215,945   1,895,081   4,082,107   4,140,018 
Total operating expenses  2,240,454   1,932,164   4,131,942   4,207,197 
                 
Income from operations  450,942   129,826   930,508   683,339 
                 
Other expenses                
Interest  (87,284)  (291,441)  (203,896)  (479,582)
Amortization of debt discount  (5,350)  (48,580)  (12,638)  (89,951)
Total other expenses  (92,634)  (340,021)  (216,534)  (569,533)
                 
Net income (loss)  358,308   (210,195)  713,974   113,806 
                 
Less: preferred dividends  -   -   -   - 
                 
Net income (loss) available to common stockholders $358,308  $(210,195) $713,974  $113,806 
                 
Net income (loss) per common share                
– basic $0.01  $(0.01) $0.02  $0.00 
– diluted $0.01  $(0.01) $0.02  $0.00 
                 
Weighted average common shares outstanding                
– basic  31,947,763   31,859,812   31,907,676   31,820,898 
– diluted  31,981,806   31,859,812   34,941,719   32,564,932 

See accompanying notes to the condensed consolidated financial statements

MamaMancini’s Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
 (unaudited)

  For the Six Months Ended 
  July 31, 2019  July 31, 2018 
       
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income $713,974  $113,806 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation  370,052   337,833 
Amortization of debt discount  12,638   89,951 
Share-based compensation  29,943   79,163 
Amortization of right of use assets  42,958   - 
Changes in operating assets and liabilities:        
Accounts receivable  (12,770)  1,334,738 
Inventories  (68,524)  (455,281)
Prepaid expenses  (159,239)  (56,776)
Accounts payable and accrued expenses  3,503   (2,987)
Current portion of operating lease liability  (42,958)  - 
Net Cash Provided by Operating Activities  889,577   1,440,447 
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Cash paid for fixed assets  (89,525)  (903,959)
Net Cash Used in Investing Activities  (89,525)  (903,959)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Repayment of note payable – related party  -   (7,812)
Borrowings from term loan  -   300,000 
Repayment of note payable  -   (500,000)
Borrowings (repayments) of line of credit, net  65,314   (708,909)
Proceeds from capital lease  -   213,250 
Repayment of term loan  (808,335)  (95,270)
Repayment of capital lease obligations  (31,213)  (12,037)
Proceeds from exercise of options  -   40,000 
Net Cash Used in Financing Activities  (774,234)  (770,778)
         
Net Increase (Decrease) in Cash  25,818   (234,290)
         
Cash - Beginning of Period  609,409   581,322 
         
Cash - End of Period $635,227  $347,032 
         
SUPPLEMENTARY CASH FLOW INFORMATION:        
Cash Paid During the Period for:        
Income taxes $-  $- 
Interest $253,763  $302,034 
         
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:        
Operating lease liability $1,599,830  $- 
Finance lease asset additions $254,166  $30,000 
Accrued interest on note payable reclassified to principal $-  $392,702 
Common stock issued for services to be rendered $71,875   - 

See accompanying notes to the condensed consolidated financial statements