Q3 Fiscal 2018 Revenue Up 61% over prior year quarter;
Q3 2018 Net Income UP 152% vs Q3 2017;
Company reports 5th consecutive profitable quarter;
Q3 Cash EBITDA was $611,000.
EAST RUTHERFORD, N.J., Dec. 15, 2017 (GLOBE NEWSWIRE) -- MamaMancini's Holdings, Inc. (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 third quarter of fiscal year 2018, ended October 31, 2017. Consolidated results for the quarter and the nine-months do not include operating results of the recently acquired Joseph Epstein Food Enterprises, Inc. (“JEFE”) which was acquired on November 1, 2017. Management believes that on a Pro-Forma basis, the addition of JEFE operations would have been significantly accretive to the Company’s earnings.
Third Quarter Highlights:
- Third quarter of fiscal year 2018 revenue increased 61% to $7.35 million compared to $4.6 million in prior year period.
- Net income for the third quarter increased 152% to $203,000 versus net income of $81,000 in prior year period.
- Net income available to common stockholders was $203,000, or $0.01 per diluted share, during the third quarter of fiscal 2018, compared to a net income of $34,000, or $0.00 per diluted share in the same quarter last year.
- Cash EBITDA, a non-GAAP financial metric (please refer to Non-GAAP Financial Measures paragraph below) for the third quarter was $611,000 compared to $471,000 in the third quarter of fiscal 2017.
- Based on preliminary financial statements provided to the Company by JEFE (which are subject to audit and final due diligence), Pro-Forma Cash EBITDA including JEFE results on a Pro-Forma consolidated basis (a non-GAAP financial metric--please refer to Non-GAAP Financial Measures paragraph below) for the third quarter would have been approximately $889,000, representing an increase of approximately $278,000 over the Company's reported Cash EBITDA on a standalone basis. Please see paragraph below concerning the Pro-Forma results.
- The Company has sold into approximately 43,500 SKU’s in 12,200 retail and grocery locations at October 31, 2017 as compared to approximately 37,700 SKU’s in 11,400 retail and grocery locations at October 31, 2016.
Nine Months Highlights:
- Revenue for the nine-months of fiscal year 2018 revenue increased 56% to $19.7 million compared to $12.6 million in prior year period.
- Net income for the nine months period was $356,000 versus net loss of $(422,000) in prior year period; an improvement of $778,000.
- Net income available to common stockholders was $264,000, or $0.01 per diluted share, compared to a net loss of $(580,000), or $(0.02) per diluted share, for the nine-month period last year.
- Cash EBITDA, a non-GAAP financial metric (please refer to Non-GAAP Financial Measures paragraph below) for the nine-month period was $1.5 million compared to $812,000 for the comparable nine-month period last year.
- Based on preliminary financial statements provided to the Company by JEFE (which are subject to audit and final due diligence), Pro-Forma Cash EBITDA including JEFE results on a Pro-Forma consolidated basis (a non-GAAP financial metric--please refer to Non-GAAP Financial Measures paragraph below) for the first nine months of fiscal year 2018 would have been approximately $2.1 million, representing an increase of approximately $600,000 over the Company's reported Cash EBITDA on a standalone basis. Please see paragraph below concerning the Pro-Forma results.
- Cash flow from operating activities was $1.1 million compared to $146,000 in the year ago nine-month period.
Carl Wolf, Chief Executive Officer of MamaMancini's, commented, "The financial and operational results of the third quarter were excellent, and they continue the growth trajectory of the past year. Revenue increased 61% versus last year’s third quarter, gross profit increased 40%, and net income increased 152%; making this our fifth consecutive profitable quarter. We are pleased with the consistent expansion in our most important growth metrics during the past year and we have every expectation of continuing progress.
Results for the third quarter were also impacted positively by the placement of additional products in major grocery retailers including Sam's Club, Costco, HyVee, Publix, Whole Foods, The Fresh Market, Ahold (Stop & Shop) and QVC. We are pleased to continue to penetrate our target markets of prepared foods and delis on the periphery of grocery stores throughout the country. Major grocery retailers are embracing our products as their nutritional, taste and convenience profiles continue to attract new customers. The prepared foods section is the fastest growing section of grocery stores as consumers increasingly choose ready-to-serve meals to accommodate their very busy work and family schedules.
The integration of the Joseph Epstein Foods Enterprise (“JEFE”) into MamaMancini’s operations is progressing on a seamless track. We expect that a fully integrated manufacturing operation will increase margins and be immediately accretive to our earnings and shareholders in the coming quarters. As with any high growth company, we may, from time to time, experience minor obstacles in expanding our operations to efficiently meet the expanding demand for our products. However, we believe that we have the experienced personnel that will enable us to successfully navigate any manufacturing bottlenecks that may arise."
Mr. Wolf concluded, “Our strategic plan continues to gain traction. We have now reported profitability in each of the last five consecutive quarters. We remain focused on execution and timely delivery of product to our customers. We expect continued strong revenue growth and seeing the positive impact of operational efficiencies as we go forward. We expect to conclude fiscal 2018 on a strong note.”
Third Quarter 2018 Results
Sales, net of slotting fees and discounts, were $7.4 million for the third quarter of fiscal 2018, a 61% increase compared to $4.6 million reported in the third quarter of fiscal 2017. The Company has sold into approximately 43,500 SKU’s in 12,200 retail and grocery locations at October 31, 2017 as compared to approximately 37,700 SKU’s in 11,400 retail and grocery locations at October 31, 2016. Gross profit for the third quarter of fiscal 2018 was $2.4 million, or 32% of sales, compared to $1.7 million, or 37% of sales, in the year ago period. Operating income for the third quarter of fiscal 2018 was $418,000, compared to an operating income of $244,000 in the third quarter of fiscal 2017. Net income for the third quarter of fiscal 2018 was $203,000, compared to a net income of $81,000 in the third quarter of fiscal 2017.
Nine Months Fiscal 2018 Results
Sales, net of slotting fees and discounts, were $19.7 million for the first nine months of fiscal 2018, a 56% increase compared to $12.6 million reported in the prior year period. Gross profit for the first nine months of fiscal 2018 was $6.3 million, or 32% of sales, compared to $4.5 million, or 36% of sales, in the year ago period. Operating income for the first nine months of fiscal 2018 was $941,000, compared to an operating income of $79,000 in the first nine months of fiscal 2017. Net income for the first nine months of fiscal 2018 was $356,000, compared to a net loss of $(422,000) in the first nine months of fiscal 2017.
Non-GAAP Financial Measures
The Company uses Cash EBITDA as a non-GAAP financial measure. The Company defines Cash EBITDA as earnings before income taxes, depreciation and amortization plus any non-cash stock payments for expenses. The Company believes that the use of Cash EBITDA is useful to investors and other users of its financial statements in evaluating the Company's operating performance because it provides them with an additional tool to compare business performance across companies and across periods. The Company uses Cash EBITDA in conjunction with traditional GAAP operating performance measures as part of its overall assessment of its performance, for planning purposes, including the preparation of its annual operating budget, and to evaluate the effectiveness of its business strategies. Management does not place undue reliance on Cash EBITDA as its only measure of operating performance. Cash EBITDA should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP.
Pro-Forma Results including JEFE
The Pro-Forma results which include the consolidation of the results of JEFE are based on preliminary financial information that the Company has received from JEFE. These financial results are subject to changes based upon an audit of the results and publishing of the Company’s audited consolidated financial results for the current fiscal year ending January 31, 2018. The acquisition of JEFE closed on November 1, 2017 and, as a result, the Company’s published consolidated financial results for the three and nine months ended October 31, 2017 do not include the financial results of JEFE for those periods.
Conference Call
The Company has scheduled a conference call for Monday, December 18, 2017 at 9:00 a.m. ET, to review the results.
Interested parties may participate on the conference call by dialing (844) 889-4326 or (412) 317-9264. A replay of the conference call will be available by dialing (877) 344-7529 or (412) 317-0088, confirmation code 10115000, through December 24, 2017.
About MamaMancini's
MamaMancini's is a marketer and distributor of a line of beef meatballs and turkey meatballs all with sauce; five cheese stuffed beef and turkey meatballs all with sauce; original beef and turkey meatloaves; chicken parmesan; stuffed peppers 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 and distributors such as Costco; Publix; Shop Rite; Jewel; Save Mart; Sam's Club; Lucky's; Lunds and Byerlys; SuperValu; Safeway; Albertsons; Spartan Nash; Whole Foods Market; Hy-Vee; Shaw's; Kings; Roche Bros.; Key Foods; Stop & Shop; Giant; Giant Eagle; Foodtown; Kroger; Shoppers; Schnucks Markets; Fresh Direct; King Kullen; Lowes; Central Market; Weis Markets; Ingles; Food City; The Fresh Market; Market Basket; Meatball Obsession; Monterrey Provisions; Porky Products; Sysco; DPI; United Natural Foods; Bozzutos; Burris Foods; and C&S. The Company sells a variety of its products on air and on line on QVC; the world's largest direct to consumer marketer.
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.
Contact:
Carl Wolf
Chairman and CEO
MamaMancini’s Holdings, Inc.
Stock Symbol: MMMB
973-985-0280
www.mamamancinis.com
carl@mamamancinis.com
Financial Tables to Follow
| MamaMancini’s Holdings, Inc. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| October 31, 2017 | January 31, 2017 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Assets: | ||||||||
| Cash | $ | 558,633 | $ | 666,580 | ||||
| Accounts receivable, net | 2,859,190 | 1,817,820 | ||||||
| Inventories | 361,111 | 443,623 | ||||||
| Prepaid expenses | 97,957 | 135,747 | ||||||
| Due from manufacturer - related party | 1,537,724 | 2,079,708 | ||||||
| Total current assets | 5,414,615 | 5,143,478 | ||||||
| Property and equipment, net | 2,111,053 | 1,175,508 | ||||||
| Deposit on machinery and equipment | 94,060 | — | ||||||
| Total Assets | $ | 7,619,728 | $ | 6,318,986 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 1,006,216 | $ | 484,752 | ||||
| Line of credit, net | 2,303,920 | 1,363,145 | ||||||
| Term loan | 165,540 | 140,004 | ||||||
| Note payable - net | 1,807,182 | 1,401,906 | ||||||
| Total current liabilities | 5,282,858 | 3,389,807 | ||||||
| Term loan - net of current | 634,460 | 513,328 | ||||||
| Note payable - net of current portion | — | 1,298,819 | ||||||
| Notes payable - related party | 117,656 | 117,656 | ||||||
| Total long-term liabilities | 752,116 | 1,929,803 | ||||||
| Total Liabilities | 6,034,974 | 5,319,610 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity: | ||||||||
| Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of October 31, 2017 and January 31, 2017, 0 and 23,400 shares outstanding as of October 31, 2017 and January 31, 2017 | — | — | ||||||
| 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; 31,716,128 and 27,810,717 shares issued and outstanding, respectively | 318 | 278 | ||||||
| Additional paid in capital | 16,145,954 | 15,825,029 | ||||||
| Common stock subscribed, $0.00001 par value; 66,667 shares, respectively | 1 | 1 | ||||||
| Accumulated deficit | (14,412,019 | ) | (14,676,432 | ) | ||||
| Less: Treasury stock, 230,000 shares, respectively | (149,500 | ) | (149,500 | ) | ||||
| Total Stockholders’ Equity | 1,584,754 | 999,376 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 7,619,728 | $ | 6,318,986 | ||||
| MamaMancini’s Holdings, Inc. | |||||||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
| October 31, | October 31, | ||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| Sales-net of slotting fees and discounts | $ | 7,351,355 | $ | 4,576,225 | $ | 19,714,090 | $ | 12,638,482 | |||||||||||
| Costs of Sales | 4,991,138 | 2,892,012 | 13,443,949 | 8,113,756 | |||||||||||||||
| Gross profit | 2,360,217 | 1,684,213 | 6,270,141 | 4,524,726 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Research and development | 27,528 | 38,529 | 77,647 | 106,316 | |||||||||||||||
| General and administrative | 1,914,914 | 1,402,121 | 5,251,090 | 4,339,234 | |||||||||||||||
| Total operating expenses | 1,942,442 | 1,440,650 | 5,328,737 | 4,445,550 | |||||||||||||||
| Income from operations | 417,775 | 243,563 | 941,404 | 79,176 | |||||||||||||||
| Other income (expense): | |||||||||||||||||||
| Interest expense | (183,974 | ) | (153,159 | ) | (528,969 | ) | (472,870 | ) | |||||||||||
| Amortization of debt discount | (30,447 | ) | (9,801 | ) | (56,457 | ) | (28,620 | ) | |||||||||||
| Total other income (expense) | (214,421 | ) | (162,960 | ) | (585,426 | ) | (501,490 | ) | |||||||||||
| Net income (loss) | 203,354 | 80,603 | 355,978 | (422,314 | ) | ||||||||||||||
| Less: preferred dividends | — | (46,800 | ) | (91,565 | ) | (158,121 | ) | ||||||||||||
| Net income (loss) available to common stockholders | $ | 203,354 | $ | 33,803 | $ | 264,413 | $ | (580,435 | ) | ||||||||||
| Net income (loss) per common share - basic | $ | 0.01 | $ | 0.00 | $ | 0.01 | $ | (0.02 | ) | ||||||||||
| Net income (loss) per common share - diluted | $ | 0.01 | $ | 0.00 | $ | 0.01 | $ | (0.02 | ) | ||||||||||
| Weighted average common shares outstanding – basic | 31,503,665 | 27,257,834 | 29,152,736 | 26,937,969 | |||||||||||||||
| Weighted average common shares outstanding – diluted | 33,283,110 | 27,507,834 | 30,932,182 | 26,937,969 | |||||||||||||||
| MamaMancini’s Holdings, Inc. | |||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||
| (Unaudited) | |||||||||||
| For the Nine Months Ended | |||||||||||
| 31-Oct-17 | 31-Oct-16 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income (loss) | $ | 355,978 | $ | (422,314 | ) | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation | 330,104 | 251,197 | |||||||||
| Amortization of debt discount and debt issuance costs | 56,457 | 28,620 | |||||||||
| Share-based compensation | 229,400 | 488,039 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| (Increase) Decrease in: | |||||||||||
| Accounts receivable | (1,041,370 | ) | (394618 | ) | |||||||
| Inventories | 82,512 | (206,752 | ) | ||||||||
| Prepaid expenses | 37,790 | (42,458 | ) | ||||||||
| Due from manufacturer - related party | 541,984 | 112,135 | |||||||||
| Increase (Decrease) in: | |||||||||||
| Accounts payable and accrued expenses | 521,464 | 39,532 | |||||||||
| Net Cash Provided by (Used In) Operating Activities | 1,114,319 | (146,619 | ) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Cash paid for fixed assets | (1,359,709 | ) | (225,792 | ) | |||||||
| Net Cash Used In Investing Activities | (1,359,709 | ) | (225,792 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Repayment of note payable – related party | - | (7,344 | ) | ||||||||
| Repayment of note payable | (950,000 | ) | - | ||||||||
| Debt issuance costs | - | (50,000 | ) | ||||||||
| Borrowings (repayments) of line of credit, net | 940,775 | 490,859 | |||||||||
| Borrowings from term loan | 251,671 | 340,000 | |||||||||
| Repayment of term loan | (105,003 | ) | (91,667 | ) | |||||||
| Repayment of promissory notes | - | (241,829 | ) | ||||||||
| Net Cash Provided By Financing Activities | 137,443 | 440,019 | |||||||||
| Net Increase (Decrease) in Cash | (107,947 | ) | 67,608 | ||||||||
| Cash - Beginning of Period | 666,580 | 587,422 | |||||||||
| Cash - End of Period | $ | 558,633 | $ | 655,030 | |||||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | |||||||||||
| Cash Paid During the Period for: | |||||||||||
| Income taxes | $ | - | $ | - | |||||||
| Interest | $ | 535,685 | $ | 191,423 | |||||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||
| Stock issued for Series A Preferred dividends | $ | 91,565 | $ | 225,114 | |||||||
| Debt issuance costs included in principal balance of note | $ | 52,236 | $ | - | |||||||
| Prepaid stock-based compensation | $ | - | $ | 7,500 | |||||||
| Accrued interest reclassified to principal balance of convertible note | $ | - | $ | 358,523 | |||||||