Q3 2020 Revenues Increase 12% to Record $9.3 Million; Drives Record Net Income of $0.4 Million
Fourth Quarter 2020 Revenues Expected to Increase 45% Year-Over-Year to $10 Million
EAST RUTHERFORD, NJ, Dec. 09, 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 third quarter ended October 31, 2019.
Recent Highlights:
- Revenues in the third quarter of 2020 increased 12% to a record $9.3 million, compared to $8.2 million in the same year-ago quarter.
- Net Income increased 15% to a record $409,000, or $0.01 per share, as compared to a net income of $356,000, or $0.01 per share, in the same year-ago quarter.
- Announced partnership with Beyond Meat to introduce a new line of fully cooked authentic Italian foods using Beyond Meat’s plant-based Beyond Beef.
- Announced multiple expansions of product placements or special merchandising activity in over 2,500 tier-1 grocery retailer locations including Kroger, Albertsons, Sam’s Club, Publix and more. MamaMancini’s has the potential of adding an additional 2,700 locations with these retailers in the next six months, provided consumer acceptance is positive.
- Announced new authorizations to existing and new retailers starting in the fourth quarter of 2019, including Sausage n Peppers, four of its innovative new Pasta Bowl product lines for supermarkets, Beef Meatballs and Sauce, Beef Meat Loaf and Several Pasta and Meatball Entrees.
- Launched new SiriusXM national radio campaign over the Thanksgiving holiday in which the Company aired close to 1,000 commercials on major SiriusXM radio channels including CNN, Fox, CNBC, and more.
- QVC customers voted MamaMancini’s Three Cheese Mini Meatballs as #1 in the “Best Heat & Eat Entrée” category during the 2019 QVC Customer Choice Food Awards.
Management Commentary
“The third quarter of fiscal 2020 was highlighted by our record revenue of $9.3 million and net income of $0.4 million,” said Carl Wolf, Chairman and Chief Executive Officer of MamaMancini’s Holdings, Inc. “This growth was been driven by our expanding product portfolio—which now includes a plant-based option in partnership with Beyond Meat—as well as our continued growth with current and new national retailers. To that end, during the third quarter we added over 2,500 tier-1 grocery retailer locations which include Kroger, Publix and Albertsons, with an option to add an additional 2,700 locations if initial store-level results are promising. We also announced new authorizations with several current and new national retailers, as well as QVC, the world’s largest direct to consumer marketer. Taken together, we are expecting sales to increase at least 45% year-over-year to $10 million in the fourth quarter of 2020. I am very pleased with our recent operational progress, which has set the stage for us to continue driving record revenue and profits while creating long-term value for our shareholders.”
Third Quarter 2020 Financial Results
Revenue for the third quarter of fiscal 2020 increased 12% to a record $9.3 million, compared to $8.2 million in the same year-ago quarter. The revenue growth was primarily a result of increased sales with current and new customers.
Gross profit increased 8% to $2.9 million in the third quarter of fiscal 2020, compared to $2.7 million in the same year-ago quarter. Gross profit as a percentage of revenue in the third quarter of fiscal 2020 totaled 31.3%, as compared to 32.6% in the same year-ago quarter, primarily due to a change in product mix and higher depreciation expense in comparison to the prior year comparable period. As the company grows sales, it expects gross margins to increase as a result of manufacturing plant efficiencies.
Operating expenses totaled $2.4 million in the third quarter of fiscal 2020, compared to $2.2 million in the same year-ago quarter. Operating expenses decreased as a percentage of sales from 26% to 25%. Operating expenses increased primarily due to increases in advertising and postage and freight.
Net income for the third quarter of fiscal 2020 grew 15% to a record $409,000, or $0.01 per share, as compared to a net income of $356,000, or $0.01 per share, in the same year-ago quarter. The increase in net income was primarily attributable to increased gross profit, lower interest and amortization expenses in 2019.
Cash and cash equivalents totaled $0.6 million as of October 31, 2019, as compared to $0.6 million as of January 31, 2019. During fiscal 2020, the Company repaid $0.2 million of its senior debt. Cash flow from operations for the nine-month period of fiscal 2020 was $1.0 million, compared to $1.6 million in the same year-ago period.
Conference Call
Management will host an investor conference call at 8:30 a.m. Eastern time today, Monday, December 9, 2019 to discuss the Company’s third quarter 2020 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:
Q3 2020 Earnings Conference Call
Date: Monday, December 9, 2019
Time: 8:30 a.m. Eastern time
U.S. Dial-in: 1-844-889-4326
International Dial-in: 1-412-317-9264
Conference ID: 10137297
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 December 16, 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 10137297.
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
| October 31, 2019 | January 31, 2019 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 610,574 | $ | 609,409 | ||||
| Accounts receivable, net | 3,297,769 | 2,698,562 | ||||||
| Other receivable | 163,983 | - | ||||||
| Inventories | 1,651,324 | 1,396,400 | ||||||
| Prepaid expenses | 348,038 | 155,178 | ||||||
| Total current assets | 6,071,688 | 4,859,549 | ||||||
| Property and equipment, net | 2,846,254 | 2,884,594 | ||||||
| Operating lease right of use assets, net | 1,524,083 | - | ||||||
| Deposits | 20,177 | 20,177 | ||||||
| Total Assets | $ | 10,462,202 | $ | 7,764,320 | ||||
| Liabilities and Stockholders’ Equity (Deficit) | ||||||||
| Liabilities: | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 3,484,903 | $ | 3,061,932 | ||||
| Term loan | 500,000 | 500,000 | ||||||
| Operating lease liability | 126,546 | - | ||||||
| Finance leases payable | 102,937 | 53,730 | ||||||
| Total current liabilities | 4,214,386 | 3,615,662 | ||||||
| Term loan – net | 899,053 | 1,914,401 | ||||||
| Line of credit – net | 2,897,348 | 2,612,034 | ||||||
| Operating lease liability – net | 1,403,187 | - | ||||||
| Finance leases payable – net | 343,324 | 162,527 | ||||||
| Notes payable - related party | 641,844 | 641,844 | ||||||
| Total long-term liabilities | 6,184,756 | 5,330,806 | ||||||
| Total Liabilities | 10,399,142 | 8,946,468 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity (Deficit): | ||||||||
| Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of October 31, 2019 and January 31, 2019, 0 and 0 shares outstanding as of October 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 October 31, 2019 and January 31, 2019 | 321 | 320 | ||||||
| Additional paid in capital | 16,669,905 | 16,547,287 | ||||||
| Accumulated deficit | (16,457,666 | ) | (17,580,255 | ) | ||||
| Less: Treasury stock, 230,000 shares at cost, respectively | (149,500 | ) | (149,500 | ) | ||||
| Total Stockholders’ Equity (Deficit) | 63,060 | (1,182,148 | ) | |||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | 10,462,202 | $ | 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 October 31, | For the Nine Months Ended October 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Sales-net of slotting fees and discounts | $ | 9,267,036 | $ | 8,242,847 | $ | 24,731,305 | $ | 21,625,671 | ||||||||
| Costs of sales | 6,366,084 | 5,555,359 | 16,767,903 | 14,047,647 | ||||||||||||
| Gross profit | 2,900,952 | 2,687,488 | 7,963,402 | 7,578,024 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 32,744 | 31,628 | 82,579 | 98,807 | ||||||||||||
| General and administrative | 2,364,608 | 2,119,751 | 6,446,715 | 6,259,769 | ||||||||||||
| Total operating expenses | 2,397,352 | 2,151,379 | 6,529,294 | 6,358,576 | ||||||||||||
| Income from operations | 503,600 | 536,109 | 1,434,108 | 1,219,448 | ||||||||||||
| Other expenses | ||||||||||||||||
| Interest | (89,635 | ) | (159,688 | ) | (293,531 | ) | (648,969 | ) | ||||||||
| Amortization of debt discount | (5,350 | ) | (20,073 | ) | (17,988 | ) | (100,325 | ) | ||||||||
| Total other expenses | (94,985 | ) | (179,761 | ) | (311,519 | ) | (749,294 | ) | ||||||||
| Net income | 408,615 | 356,348 | 1,122,589 | 470,154 | ||||||||||||
| Less: preferred dividends | - | - | - | - | ||||||||||||
| Net income available to common stockholders | $ | 408,615 | $ | 356,348 | $ | 1,122,589 | $ | 470,154 | ||||||||
| Net income per common share | ||||||||||||||||
| – basic | $ | 0.01 | $ | 0.01 | $ | 0.04 | $ | 0.01 | ||||||||
| – diluted | $ | 0.01 | $ | 0.01 | $ | 0.04 | $ | 0.01 | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| – basic | 31,991,241 | 31,866,241 | 31,935,837 | 31,836,178 | ||||||||||||
| – diluted | 32,091,210 | 32,489,369 | 32,035,806 | 32,459,307 | ||||||||||||
See accompanying notes to the condensed consolidated financial statements
MamaMancini’s Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| For the Nine Months Ended | |||||||
| October 31, 2019 | October 31, 2018 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income | $ | 1,122,589 | $ | 470,154 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation | 495,005 | 511,878 | |||||
| Amortization of debt discount | 17,988 | 100,325 | |||||
| Share-based compensation | 67,857 | 128,039 | |||||
| Amortization of right of use assets | 75,747 | - | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (599,207 | ) | (138,596) | ||||
| Other receivable | (163,983 | ) | - | ||||
| Inventories | (254,924 | ) | (180,569) | ||||
| Prepaid expenses | (138,098 | ) | 57,495 | ||||
| Accounts payable and accrued expenses | 422,971 | 699,699 | |||||
| Current portion of operating lease liability | (70,097 | ) | - | ||||
| Net Cash Provided by Operating Activities | 975,848 | 1,648,425 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Cash paid for fixed assets | (163,186 | ) | (1,026,386) | ||||
| Net Cash Used in Investing Activities | (163,186 | ) | (1,026,386) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Repayment of note payable – related party | - | (7,812) | |||||
| Borrowings from term loan | 41,917 | 300,000 | |||||
| Repayment of term loan | (1,075,253 | ) | (174,155) | ||||
| Repayment of note payable | - | (600,000) | |||||
| Borrowings (repayments) of line of credit, net | 285,314 | (467,087) | |||||
| Proceeds from capital lease | - | 213,250 | |||||
| Repayment of capital lease obligations | (63,475 | ) | (16,343) | ||||
| Debt extension fees | - | (31,125) | |||||
| Proceeds from exercise of options | - | 40,000 | |||||
| Net Cash Used in Financing Activities | (811,497 | ) | (743,272) | ||||
| Net Increase (Decrease) in Cash | 1,165 | (121,233) | |||||
| Cash - Beginning of Period | 609,409 | 581,322 | |||||
| Cash - End of Period | $ | 610,574 | $ | 460,089 | |||
| SUPPLEMENTARY CASH FLOW INFORMATION: | |||||||
| Cash Paid During the Period for: | |||||||
| Income taxes | $ | - | $ | - | |||
| Interest | $ | 363,519 | $ | 302,034 | |||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||
| Operating lease liability | $ | 1,599,830 | $ | - | |||
| Finance lease asset additions | $ | 293,479 | $ | 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