Q4 2021 Net Income Increases 311% to Record $1.7 Million
Record Results Driven by Strong Gross Margin Growth and a $0.7 Million Deferred Tax Benefit
EAST RUTHERFORD, NJ, April 20, 2021 (GLOBE NEWSWIRE) -- MamaMancini's Holdings, Inc. (OTCQB: MMMB), a marketer of specialty pre-prepared, frozen and refrigerated food products, has reported its financial results for the fourth quarter and fiscal year ended January 31, 2021.
Financial Summary:
| Three Months Ended Jan. 31, | Fiscal Year Ended Jan. 31, | |||||||||||
| $ in millions | 2021 | 2020 | % Increase | 2021 | 2020 | % Increase | ||||||
| Revenues | $ | 10.0 | $ | 9.9 | 1.4 | % | $ | 40.8 | $ | 33.8 | 20.8 | % |
| Gross Profit | $ | 3.3 | $ | 2.9 | 15.0 | % | $ | 12.7 | $ | 10.0 | 27.6 | % |
| Operating Expenses | $ | 2.4 | $ | 2.2 | 7.7 | % | $ | 9.3 | $ | 7.9 | 17.2 | % |
| Net Income | $ | 1.7 | $ | 0.4 | 311.4 | % | $ | 4.1 | $ | 1.5 | 165 | % |
| Earnings per Share (Diluted) | $ | 0.05 | $ | 0.01 | 500 | % | $ | 0.12 | $ | 0.04 | 200 | % |
Key Fourth Quarter Fiscal 2021 & Subsequent Operational Highlights:
- Advanced new internal search program to target and acquire complementary food product companies that are immediately accretive and meet stringent sales as well as other criteria.
- Received new authorizations representing up to 15,000 new spots on retailer shelves from national accounts, club stores and large regional retailers for introduction in early/mid-2021, indicating significant potential uptick in economic growth in U.S. for 2021.
- Secured additional new retailer commitments including new product placements at 220 Shop Rite locations, 500 Winn Dixie locations, 600 Sam’s Club locations, a commitment for a minimum of 500 Walmart locations (previously announced, but not committed) and 300 independent chain locations through distributor Krasdale Foods.
- Launched a major new national radio campaign with SiriusXM, which reaches more than 70 million people, to air an estimated 1,000 commercials in honor of the centennial of the arrival of Ana “Mama” Mancini to the United States.
- Appointed Connor Haley and Michael Stengel, prominent business and financial leaders with nearly 50 years of financial, hospitality and food service executive leadership experience, to the Company’s Board of Directors.
- Filed initial listing application with NASDAQ; Presented at leading virtual investor conferences including the ROTH Capital Growth Conference, Proactive’s One2One Virtual Investor Forum, the Benzinga Global Small Cap Conference and the Virtual Fall Investor Summit.
Management Commentary
“Our fiscal 2021 was a record year of growth despite intense hardships at the national level, driven by a shift in consumer purchasing power from restaurants to grocery stores in light of the COVID-19 pandemic,” said Carl Wolf, Chairman and Chief Executive Officer of MamaMancini’s. “We continued to supply grocers throughout the pandemic with minimal impact on operations, launching effective new advertising campaigns and securing exciting new product placements on thousands of retailer shelves nationwide, expanding both the breadth and depth of our reach as a brand.
“To further supplement our incredible growth, we advanced a significant internal effort to explore potential acquisitions, focusing on companies with complementary products in the perimeter of the supermarket as well as exceptional operational and financial metrics. The ability to realize new distribution relationships and push an existing production through our already robust distributor network, all at an attractive valuation, is our chief goal. We will remain highly selective to ensure any target is accretive, reasonably valued and highly complementary to our core business. We look forward to additional announcements on this front as potential targets move through our due diligence pipeline.
“While fiscal 2021 was a record year, there are still extremely attractive growth areas for the core business as we enter fiscal 2022. From major box retailer engagements to hot bar placements at leading groceries nationwide, our outlook on the near-term food market remains optimistic. When taken in tandem with the new acquisition strategy as well as our recent application to uplist to the Nasdaq Capital Market, I believe that fiscal 2022 will mark another record year for our shareholders,” concluded Wolf.
Fourth Quarter and Fiscal 2021 Financial Results
Revenue for the fourth quarter of fiscal 2021 increased 1.4% to a record $10.0 million, compared to $9.9 million in the same year-ago quarter. Revenue for fiscal 2021 increased 20.8% to a record $40.8 million, compared to $33.8 million in fiscal 2020. The revenue increase for the year was a result of increased volume in Club Store accounts in the Spring and through new product introductions later in the year.
Gross profit increased 15% to $3.3 million, or 32.9% of total revenues, in the fourth quarter of fiscal 2021, compared to $2.9 million, or 29.0% of total revenues, in the same year-ago quarter. Gross profit increased 27.6% to $12.7 million, or 31.3% of total revenues, in fiscal 2021, compared to $10.0 million, or 29.6% of total revenues, in fiscal 2020. The increase in gross profit in the fourth quarter is primarily due to a change in customer mix to higher margin accounts including QVC.
Operating expenses totaled $2.4 million in the fourth quarter of fiscal 2021 compared to $2.2 million in the same year-ago quarter. As a percentage of sales, operating expenses increased in the fourth quarter of 2021 to 23.8% from 22.4%. Operating expenses totaled $9.3 million in fiscal 2021, compared to $7.9 million in fiscal 2020. As a percentage of sales, operating expenses decreased in fiscal 2021 at 22.7% of sales. Operating expense in the fourth quarter increased mainly due to a higher percentage of volume in higher margin accounts with higher merchandising support in direct relation to those accounts.
Net income for the fourth quarter of fiscal 2021 grew by a significant 311% to $1.7 million, or $0.05 per diluted share, as compared to a net income of $0.4 million, or $0.01 per diluted share, in the same year-ago quarter. Net income for fiscal 2021 grew 165% to a record $4.1 million, or $0.12 per diluted share, as compared to net income of $1.5 million, or $0.04 per diluted share, in fiscal 2020. The increase in net income was attributable to increased sales, higher gross margin and lower interest expenses, and a non-recurring deferred tax benefit of $0.74 million.
Cash and cash equivalents as of January 31, 2021 was $3.2 million, as compared to $0.4 million as of January 31, 2020. The increased cash balance benefitted from $3.7 million in cash flow from operations in fiscal 2021, proceeds from warrant redemptions, and offset by a paydown of debt.
Conference Call
Management will host an investor conference call at 4:30 p.m. Eastern time today to discuss the Company’s fourth quarter 2021 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:
Q4 2021 Earnings Conference Call
Date: Tuesday, April 20, 2020
Time: 4:30 p.m. Eastern time
U.S. Dial-in: 1-844-889-4326
International Dial-in: 1-412-317-9264
Conference ID: 10154331
Webcast: https://dpregister.com/sreg/10154331/e6481a195e
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 April 27, 2021. 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 10154331.
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 pasta bowl 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 Sams Club, Whole Foods, Publix, Costco and Albertsons, as well as through national distributors such as Sysco and United Natural Foods. The Company also regularly maintains a direct-to-consumer presence through presentations on QVC. 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.
Company Contact:
Carl Wolf
Chief Executive Officer
MamaMancini’s Holdings
(973) 985-0280
carl@mamamancinis.com
Investor Relations Contact:
Lucas A. Zimmerman
Senior Vice President
MZ Group - MZ North America
(949) 259-4987
MMMB@mzgroup.us
www.mzgroup.us
MamaMancini’s Holdings, Inc.
Consolidated Balance Sheets
| January 31, 2021 | January 31, 2020 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 3,190,560 | $ | 393,683 | ||||
| Accounts receivable, net | 3,973,793 | 3,727,887 | ||||||
| Inventories | 1,195,211 | 1,246,417 | ||||||
| Prepaid expenses | 519,887 | 252,268 | ||||||
| Total current assets | 8,879,451 | 5,620,255 | ||||||
| Property and equipment, net | 2,963,602 | 2,805,843 | ||||||
| Intangibles | 87,639 | - | ||||||
| Operating lease right of use assets, net | 1,352,483 | 1,490,794 | ||||||
| Deferred tax asset | 744,973 | - | ||||||
| Deposits | 20,177 | 20,177 | ||||||
| Total Assets | $ | 14,048,325 | $ | 9,937,069 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Liabilities: | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 3,707,111 | $ | 3,552,790 | ||||
| Term loan | - | 423,799 | ||||||
| Operating lease liability | 147,684 | 126,516 | ||||||
| Finance leases payable | 190,554 | 105,126 | ||||||
| Total current liabilities | 4,045,349 | 4,208,231 | ||||||
| Line of credit – net | - | 2,997,348 | ||||||
| Operating lease liability – net | 1,218,487 | 1,372,349 | ||||||
| Finance leases payable – net | 474,743 | 315,234 | ||||||
| Notes payable - related party | - | 641,844 | ||||||
| Total long-term liabilities | 1,693,230 | 5,326,775 | ||||||
| Total Liabilities | 5,738,579 | 9,535,006 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity: | ||||||||
| Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of January 31, 2021 and 2020, 0 and 0 shares outstanding as of January 31, 2021 and 2020 | - | - | ||||||
| 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; 35,603,731 and 31,991,241 shares issued and outstanding as of January 31, 2021 and 2020 | 357 | 321 | ||||||
| Additional paid in capital | 20,535,793 | 16,695,352 | ||||||
| Accumulated deficit | (12,076,904 | ) | (16,144,110 | ) | ||||
| Less: Treasury stock, 230,000 shares at cost, respectively | (149,500 | ) | (149,500 | ) | ||||
| Total Stockholders’ Equity | 8,309,746 | 402,063 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 14,048,325 | $ | 9,937,069 | ||||
MamaMancini’s Holdings, Inc.
Consolidated Statements of Income
| For the Years Ended January 31, | ||||||||
| 2021 | 2020 | |||||||
| Sales-net of slotting fees and discounts | $ | 40,758,605 | $ | 33,750,465 | ||||
| Costs of sales | 28,019,296 | 23,766,137 | ||||||
| Gross profit | 12,739,309 | 9,984,328 | ||||||
| Operating expenses: | ||||||||
| Research and development | 110,713 | 114,626 | ||||||
| General and administrative | 9,150,748 | 7,786,278 | ||||||
| Total operating expenses | 9,261,461 | 7,900,904 | ||||||
| Income from operations | 3,477,848 | 2,083,424 | ||||||
| Other expenses | ||||||||
| Interest | (137,751 | ) | (482,995 | ) | ||||
| Amortization of debt discount | (17,864 | ) | (67,735 | ) | ||||
| Total other expenses | (155,615 | ) | (550,730 | ) | ||||
| Net income before income tax provision | 3,322,233 | 1,532,694 | ||||||
| Income tax benefit | 744,973 | - | ||||||
| Net income | $ | 4,067,206 | $ | 1,532,694 | ||||
| Net income per common share | ||||||||
| – basic | $ | 0.12 | $ | 0.05 | ||||
| – diluted | $ | 0.12 | $ | 0.04 | ||||
| Weighted average common shares outstanding | ||||||||
| – basic | 33,431,524 | 31,949,803 | ||||||
| – diluted | 33,944,897 | 34,339,256 | ||||||
MamaMancini’s Holdings, Inc.
Consolidated Statements of Cash Flows
| For the Year Ended January 31, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 4,067,206 | $ | 1,532,694 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 663,001 | 640,246 | ||||||
| Amortization of debt discount | 17,864 | 67,735 | ||||||
| Share-based compensation | 52,895 | 93,862 | ||||||
| Amortization of right of use assets | 138,311 | 109,036 | ||||||
| Change in deferred tax asset | (744,973 | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (245,906 | ) | (1,077,063 | ) | ||||
| Inventories | 51,206 | 101,172 | ||||||
| Prepaid expenses | (267,619 | ) | (42,886 | ) | ||||
| Accounts payable and accrued expenses | 99,249 | 490,858 | ||||||
| Operating lease liability | (132,694 | ) | (100,965 | ) | ||||
| Net Cash Provided by Operating Activities | 3,698,540 | 1,814,689 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Cash paid for fixed assets | (419,373 | ) | (268,106 | ) | ||||
| Cash paid for intangible assets | (32,567 | ) | - | |||||
| Net Cash Used in Investing Activities | (451,940 | ) | (268,106 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Repayment of related party notes payable | (641,844 | ) | - | |||||
| Repayments of term loan | (441,663 | ) | (2,058,337 | ) | ||||
| Proceeds from promissory note | 330,505 | - | ||||||
| Repayment of promissory note | (330,505 | ) | - | |||||
| Borrowings (repayments) of line of credit, net | (2,997,348 | ) | 385,314 | |||||
| Repayment of capital lease obligations | (156,450 | ) | (89,376 | ) | ||||
| Proceeds from exercise of options | 14,400 | - | ||||||
| Proceeds from exercise of warrants | 3,773,182 | - | ||||||
| Net Cash Used in Financing Activities | (449,723 | ) | (1,762,399 | ) | ||||
| Net Increase (Decrease) in Cash | 2,796,877 | (215,726 | ) | |||||
| Cash - Beginning of Period | 393,683 | 609,409 | ||||||
| Cash - End of Period | $ | 3,190,560 | $ | 393,683 | ||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||
| Cash Paid During the Period for: | ||||||||
| Income taxes | $ | - | $ | - | ||||
| Interest | $ | 174,735 | $ | 548,894 | ||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Operating lease liability | $ | - | $ | 1,599,830 | ||||
| Finance lease asset additions | $ | 401,387 | $ | 293,479 | ||||
| Common stock issued for services to be rendered | $ | - | $ | 71,875 | ||||
| Acquisition of software via contract liability | $ | 55,072 | $ | - | ||||