Reports Record Sales, Net Income from Operations, EBITDA and Net Income;
Significantly Improves Working Capital and Balance Sheet with New Financing in January
EAST RUTHERFORD, NJ, April 23, 2019 (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 fourth quarter and fiscal year 2019, ended January 31, 2019.
Fiscal Year Highlights:
- Fiscal year 2019 revenue increased 4% to $28.5 million compared to $27.5 million in fiscal 2018.
- Fiscal year 2019 gross margin was 35%, attributed to manufacturing efficiencies and cost control, versus 34% in the prior fiscal year.
- Total operating expenses for the fiscal year 2019 increased 2% as the Company maintained strong expense control during the year versus a 21% increase in fiscal 2018 operating expenses.
- Income from operations for fiscal 2019 improved to $1.6 million from $1.1 million in fiscal 2018; an increase of approximately 45%.
- EBITDA for fiscal 2019 was $2.2 million compared to $1.6 million in fiscal 2018.
- Net Income available to common shareholders for fiscal year 2019 was $550,048, or $0.02 per share, compared to $228,175 or $0.01 per share, in fiscal 2018.
- Fiscal and quarterly results for 2019 include non-cash expenses of $175,972 for the fiscal year and $42,219 for the fourth quarter relating to stock options to employees and directors.
Fourth Quarter Highlights:
- During the fourth quarter the Company arranged a new $3.5 million working capital line of credit with M&T Bank at LIBOR plus four points with a two-year expiration, and a $2.5 million five-year note at LIBOR plus four points with repayments in equal payments over 60 months with no prepayment penalty. The Company estimates it initially will be paying a 6.5% per annum interest rate on the new financing, versus an average of over 12.5% per annum on the prior financing it replaced.
- The new financing significantly improved the Company’s working capital and balance sheet resulting in an increase $4,147,296 in working capital from prior year.
- Fourth quarter of fiscal year 2019 revenue was $6,896,441 compared to $7,829,245 in prior year period. The Company believes the lower sales for the quarter were not consistent with long term trends. The lower sales were mainly the result of inventory changes in its largest customers whose sales of MamaMancini’s products to its consumers were positive with prior year numbers. Also, the Company did not receive an in-and-out rotation for the holidays this year with a major retailer. However, management believes this customer will reestablish the in-and-out rotation this year.
- Gross Margin was 35% of sales versus 33 % in the prior year period.
- Operating expenses decreased by $285,333 in the fourth quarter fiscal 2019 compared to fourth quarter fiscal 2018.
- Net Operating Income was $345,616 compared to $250,589 in the prior year period.
- Net income was $79,894 compared to $34,663 in the prior year period. Net Income in 2019 was negatively affected by a charge of $148,438 related to the termination of prior financing and the transition to M&T Bank.
Carl Wolf, Chief Executive Officer of MamaMancini's, commented, “During fiscal year 2019 we made significant improvements to our manufacturing capabilities, planned the introduction of a number of new products, and made the strategic decision to enter into the food service segment of the business. This is important in that the food service business is effectively as large as the retail grocery segment in which we currently compete. We believe we have the manufacturing capacity and the necessary menu to provide nutritious and rapidly prepared products to food service distributors; chain restaurants; convenience stores; health and eldercare institutions; college and universities, corporate commissaries and kitchens; casinos; and export distributors.
“We were also pleased to have arranged our new working capital line and five-year note with M&T Bank. We will benefit from substantially lower interest rates for the terms of these capital sources. We are pleased to be working with a financial institution the caliber of M&T Bank. We appreciate the confidence that M&T has invested in us and we look forward to growing our business, and our relationship with M&T Bank, in the years to come.”
Mr. Wolf concluded, “Subsequent to the end of the fiscal year we commenced shipments of nine new SKUs to new retail grocery customers including BJ Club Stores, Walmart and Ahold. These are large new customers that offer the potential for deeper integration into their large network of stores. We initiated a comprehensive advertising strategy with Sirius XM where we ran up to 1,000 commercials in the first fiscal quarter through the Easter and Passover holidays. We also hired Allan Sabatier as our Vice President of Business Development to begin, in earnest, our entry into the food service segment. Allan has extensive experience in this market, and we are excited with the possibilities ahead. While the financial results of fiscal 2019 represented a substantial increase in operating and net income from the prior fiscal year, we believe we have set the stage in fiscal 2019 for improving financial and operational results in fiscal 2020 and beyond.”
Non-GAAP Measures:
EBITDA, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measures included in this press release, however, should be considered in addition to, and not as a substitute for or superior to, the comparable measure prepared in accordance with GAAP. We believe that considering the non-GAAP net income before income taxes and before certain non-cash expenses assists management and investors by looking at our performance across reporting periods on a consistent basis excluding these certain charges that are not uses of cash from our reported net loss before income taxes.
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, and original beef and turkey meat loaves products. The Company also sells Chicken Parmesan, Stuffed Pepper Mix, Sausage n Peppers, Sunday Dinner and Chicken Alfredo. The Company recently added five pasta bowls to its offerings. The Company's sales have been growing on a consistent basis as the Company expands its distribution channels, which includes major retailers such as Publix, Shop Rite, Jewel, Walmart, Lunds and Byerlys, SUPERVALU, Safeway, Albertsons, Whole Foods Market, Shaw's, Kings, BJ’s Club Stores, Roche Bros., Key Foods, Stop & Shop, Giant, Giant Eagle, Foodtown, Sam's Club, Costco, Pavillion Stores, HEB, Rouses, Hannaford, Kroger, Shoppers, King Kullen, Central Markets, Weis Markets, Ingles, and The Fresh Market. The Company sells to distributors such as Sysco, AWI, UNFI, SUPERVALU, Kehe, Burris Logistics and C&S Wholesale Grocers. In addition, the Company sells a wide variety of its products through QVC, the world's largest direct to consumer marketer, via on air presentations, auto ship programs, and direct purchases through the internet.
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
Financial Tables to Follow
MamaMancini’s Holdings, Inc.
Consolidated Balance Sheets
| January 31, 2019 | January 31, 2018 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 609,409 | $ | 581,322 | ||||
| Accounts receivable, net | 2,698,562 | 3,084,715 | ||||||
| Inventories | 1,396,400 | 824,276 | ||||||
| Prepaid expenses | 155,178 | 261,980 | ||||||
| Total current assets | 4,859,549 | 4,752,293 | ||||||
| Property and equipment, net | 2,884,594 | 2,499,875 | ||||||
| Deposits | 20,177 | 20,177 | ||||||
| Total Assets | $ | 7,764,320 | $ | 7,272,345 | ||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Liabilities: | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 3,061,932 | $ | 3,456,918 | ||||
| Line of credit, net | - | 2,688,764 | ||||||
| Term loans | 500,000 | 106,938 | ||||||
| Capital leases payable | 53,730 | - | ||||||
| Notes payable – net | - | 1,403,082 | ||||||
| Total current liabilities | 3,615,662 | 7,655,702 | ||||||
| Term loans – net | 1,914,401 | 651,677 | ||||||
| Line of credit – net | 2,612,034 | - | ||||||
| Capital leases payable – net | 162,527 | - | ||||||
| Note payable – net | - | 250,000 | ||||||
| Notes payable - related party | 641,844 | 649,656 | ||||||
| Total long-term liabilities | 5,330,806 | 1,551,333 | ||||||
| Total Liabilities | 8,946,468 | 9,207,035 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Deficit: | ||||||||
| Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of January 31, 2019 and 2018, 0 and 23,400 shares outstanding as of January 31, 2019 and 2018 | - | - | ||||||
| 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; 31,866,241 and 31,753,437 shares issued and outstanding as of January 31, 2019 and 2018, respectively | 320 | 319 | ||||||
| Additional paid in capital | 16,547,287 | 16,344,794 | ||||||
| Accumulated deficit | (17,580,255 | ) | (18,130,303 | ) | ||||
| Less: Treasury stock, 230,000 shares, respectively | (149,500 | ) | (149,500 | ) | ||||
| Total Stockholders’ Deficit | (1,182,148 | ) | (1,934,690 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 7,764,320 | $ | 7,272,345 | ||||
MamaMancini’s Holdings, Inc.
Consolidated Statements of Operations
| For the Years Ended | ||||||||
| January 31, 2019 | January 31, 2018 | |||||||
| Sales - net of slotting fees and discounts | $ | 28,522,112 | $ | 27,543,335 | ||||
| Cost of sales | 18,531,678 | 18,282,660 | ||||||
| Gross profit | 9,990,434 | 9,260,675 | ||||||
| Operating expenses | ||||||||
| Research and development | 130,920 | 138,000 | ||||||
| General and administrative | 8,294,450 | 8,059,533 | ||||||
| Total operating expenses | 8,425,370 | 8,197,533 | ||||||
| Income from operations | 1,565,064 | 1,063,142 | ||||||
| Other expenses | ||||||||
| Interest | (881,702 | ) | (679,974 | ) | ||||
| Amortization of debt discount | (133,314 | ) | (63,428 | ) | ||||
| Total other expenses | (1,015,016 | ) | (743,402 | ) | ||||
| Net income | 550,048 | 319,740 | ||||||
| Less: preferred dividends | - | (91,565 | ) | |||||
| Net income (loss) available to common stockholders | $ | 550,048 | $ | 228,175 | ||||
| Net income (loss) per common share - basic and diluted | $ | 0.02 | $ | 0.01 | ||||
| Weighted average common shares outstanding | ||||||||
| - basic | 31,843,755 | 29,811,521 | ||||||
| - diluted | 32,521,821 | 32,205,577 | ||||||
MamaMancini’s Holdings, Inc.
Consolidated Statements of Cash Flows
| For the Years Ended | ||||||||
| January 31,2019 | January 31,2018 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 550,048 | $ | 319,740 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 679,005 | 538,322 | ||||||
| Amortization of debt discount | 133,314 | 63,428 | ||||||
| Share-based compensation | 162,494 | 428,240 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 386,153 | (1,266,895 | ) | |||||
| Inventories | (572,124 | ) | (17,653 | ) | ||||
| Prepaid expenses | 106,802 | (81,720 | ) | |||||
| Accounts payable and accrued expenses | (2,284 | ) | 1,332,038 | |||||
| Net Cash Provided by Operating Activities | 1,443,408 | 1,315,500 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Cash paid for fixed assets | (1,033,724 | ) | (1,474,816 | ) | ||||
| Net Cash Used in Investing Activities | (1,033,724 | ) | (1,474,816 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Repayment of note payable - related party | (7,812 | ) | - | |||||
| Repayment of term loan | (1,058,615 | ) | (146,388 | ) | ||||
| Borrowings from term loan | 2,800,000 | 251,671 | ||||||
| Repayment of note payable | (2,130625 | ) | (1,350,000 | ) | ||||
| Borrowings (repayments) of line of credit, net | (90,356 | ) | 1,339,245 | |||||
| Proceeds from capital lease | 213,250 | - | ||||||
| Repayment of capital lease obligations | (26,993 | ) | - | |||||
| Debt issuance costs | (120,446 | ) | (24,697 | ) | ||||
| Proceeds from exercise of options | 40,000 | - | ||||||
| Net Cash Provided by (Used in) Financing Activities | (381,597 | ) | 69,831 | |||||
| Net Increase (Decrease) in Cash | 28,087 | (89,485 | ) | |||||
| Cash - Beginning of Period | 581,322 | 670,807 | ||||||
| Cash - End of Period | $ | 609,409 | $ | 581,322 | ||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||
| Cash Paid During the Period for: | ||||||||
| Income taxes | $ | - | $ | - | ||||
| Interest | $ | 638,029 | $ | 464,958 | ||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Accrued interest on note payable reclassified to principal | $ | 392,702 | $ | - | ||||
| Capital lease asset additions | $ | 30,000 | $ | - | ||||
| Stock issued for Series A Preferred dividends | $ | - | $ | 91,565 | ||||
| Debt issuance costs included in principal balance of note | $ | - | $ | 52,236 | ||||