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