Q4 2022 Revenues Increase 38.5% to Record $13.9 Million
EAST RUTHERFORD, NJ, May 31, 2022 (GLOBE NEWSWIRE) -- MamaMancini's Holdings, Inc. (NASDAQ: MMMB), a marketer and distributor of specialty pre-prepared all-natural foods, has reported its financial results for the fourth quarter and fiscal year ended January 31, 2022.
Financial Summary:
| Three Months Ended Jan. 31, | Fiscal Year Ended Jan. 31, | |||||||||||||||||||
| $ in millions | 2022 | 2021 | % Increase | 2022 | 2021 | % Increase | ||||||||||||||
| Revenues | $ | 13.9 | $ | 10.0 | 38.5 | % | $ | 47.1 | $ | 40.8 | 15.4 | % | ||||||||
| Gross Profit | $ | 2.4 | $ | 3.3 | -26.8 | % | $ | 11.9 | $ | 12.7 | -6.3 | % | ||||||||
| Operating Expenses | $ | 3.8 | $ | 2.4 | 57.1 | % | $ | 11.8 | $ | 9.3 | 26.9 | % | ||||||||
| Net Income (Loss) | ($ | 1.3 | ) | $ | 1.7 | - | ($ | 0.4 | ) | $ | 4.1 | - | ||||||||
| Earnings per Share (Diluted) | ($ | 0.04 | ) | $ | 0.05 | - | ($ | 0.01 | ) | $ | 0.12 | - | ||||||||
Key Fourth Quarter Fiscal 2022 & Subsequent Operational Highlights:
- Announced the acquisition of two premier, related gourmet food manufacturers, T&L Creative Salads, Inc. (“T&L”) and Olive Branch, LLC.
- New acquisitions expected to generate $35 million in 2022 sales with products that are highly symbiotic with the existing MamaMancini’s distribution network
- Added new national and regional customers from the acquisition T&L and Olive Branch, with the acquisition providing an estimated 3,000+ new locations and over 10,000 spots on retailer shelves in January.
- Secured new authorizations and shipments of products into tier-1 national and regional food retailers, club stores and a distributor to a major European airline carrier, including the notable addition of T&L Creative Salads products into existing relationships at Sam’s Club.
- Named the coveted Today’s Special Value deal on QVC for December 8th, securing approximately 5 hours of airtime throughout the day. This drove expected sales of $2,000,000 spread out through calendar 2021 and 2022.
- Presented at leading investor conferences, including the Planet MicroCap Showcase 2022 in Las Vegas and the upcoming LD Micro Invitational in Westlake Village.
Management Commentary
“The fourth quarter was highlighted by record revenues, as well as the acquisition of premier gourmet food manufacturers T&L and Olive Branch, a highly symbiotic pairing with our distribution network that we expect to generate at least $35 million in sales in 2022 – in addition to MamaMancini’s core revenue base,” said Carl Wolf, Chairman and CEO of MamaMancini’s. “The acquisition significantly expanded our existing business in the rapidly growing fresh prepared foods segment, where we believe we can achieve a substantial increase in sales and EBITDA by leveraging established national distribution partnerships. This was quickly demonstrated during the quarter with the addition of T&L products into existing relationships at Sam’s Club. Integration of the acquisition has proceeded rapidly, bringing with it over 3,000 new locations for the combined company and over 10,000 spots on retailer shelves.
“Given our ongoing growth and the addition of revenue from the acquisitions, we believe MamaMancini’s will generate at least $20 million in sales in the first quarter of fiscal year 2023 and approach a $100 million annual sales run-rate over the next year. This is possible through pushing more of our SKUs per relationship and driving stronger sales per location with complementary products with minimal overlap. Looking ahead to continue this momentum, we continue to see attractive multiples in the food product space and will evaluate additional acquisition opportunities that are immediately accretive.
“Our continued new product innovation paid off in April as our first-ever QVC sale of the Original Meatballs in a Cup product promptly sold out and received a notable order backlog, which we filled in the weeks following the QVC live presentation. On the margin front, we are starting to more rapidly pass along price increases to our customers with minimal lead time, which should enhance margins going forward. This margin compression, paired with $748K in acquisition expenses and $276K in inventory write offs and increased expense accruals , is what drove our temporary reduction in profitability in the fourth quarter.
“In summary, the last several months were a time of foundation building for the year ahead – from which our vision of MamaMancini’s as a national platform company will emerge. I look forward to continued execution in the months ahead as we strive to create long-term value for our shareholders,” concluded Wolf.
Fourth Quarter and Fiscal 2022 Financial Results
Revenue for the fourth quarter of fiscal 2022 increased 38.5% to a record $13.9 million, compared to $10.0 million in the same year-ago quarter. Revenue for fiscal 2022 increased 15.4% to a record $47.1 million, compared to $40.8 million in fiscal 2021. The revenue increase for the year was a result of establishing a greater balance of major customer volumes attributed to growth in sales across a strong portfolio of both national and large regional grocery chains and club stores.
Gross profit decreased 26.8% to $2.4 million, or 17.4% of total revenues, in the fourth quarter of fiscal 2022, compared to $3.3 million, or 32.9% of total revenues, in the same year-ago quarter. Gross profit decreased 6.3% to $11.9 million, or 25.2% of total revenues, in fiscal 2022, compared to $12.7 million, or 31.1% of total revenues, in fiscal 2021. The decrease in gross profit in the fourth quarter is primarily due to increases in raw material costs, packaging costs and in-bound freight costs which outpaced sales price increases during FY22 Q3 and Q4.
Operating expenses totaled $3.8 million in the fourth quarter of fiscal 2022 compared to $2.4 million in the same year-ago quarter. As a percentage of sales, operating expenses increased in the fourth quarter of 2022 to 27.2% from 23.8%. Operating expenses totaled $11.8 million in fiscal 2022, compared to $9.3 million in fiscal 2021. As a percentage of sales, operating expenses increased in fiscal 2022 at 25.0% of sales as compared to 22.7% in fiscal 2021. Operating expense in the fourth quarter increased mainly due to transportation rate increases and fuel surcharges, $0.75 million in acquisition related expenses, $0.20 million in increased accruals for freight and marketing expenses, as well as costs associated with uplisting to the Nasdaq.
Net loss for the fourth quarter of fiscal 2022 was $1.3 million, or $0.04 per diluted share, as compared to a net income of $1.7 million, or $0.05 per diluted share, in the same year-ago quarter. Net loss for fiscal 2022 was $0.4 million, or $0.01 per diluted share, as compared to net income of $4.1 million, or $0.12 per diluted share, in fiscal 2021. The decrease in net income was attributable to lower gross margin, higher freight and shipping expenses, acquisition related expenses, as well as increases in marketing accruals, and tax expense of $0.3 million as compared to a tax benefit of $0.7 million in the prior period.
Cash and cash equivalents as of January 31, 2022 was $0.9 million, as compared to $3.2 million as of January 31, 2021. The difference in cash balance is chiefly due to a substantial usage of cash to fund the acquisition made in December 2021.
Conference Call
Management will host an investor conference call at 8:30 a.m. Eastern time on Tuesday, May 31, 2022 to discuss the Company’s fourth quarter fiscal 2022 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:
Q4 2022 Earnings Conference Call
Date: Tuesday, May 31, 2022
Time: 8:30 a.m. Eastern time
U.S. Dial-in: 1-844-889-4326
International Dial-in: 1-412-317-9264
Conference ID: 5401071
Webcast: https://services.choruscall.com/mediaframe/webcast.html?webcastid=jJxZfmTz
Please dial in at least five minutes before the start of the call to ensure timely participation.
A telephone playback of the call will be available through June 7, 2022. To listen, please call 1-877-344-7529 within the United States or 1-412-317-0088 when calling internationally and use the replay pin number 5401071.
About MamaMancini’s Holdings, Inc.
MamaMancini's Holdings, Inc. (NASDAQ: MMMB) is a marketer and distributor of specialty pre-prepared, all-natural foods. MamaMancini’s broad product portfolio consists of meatballs, meatloaf, sausages and pasta bowls with beef, turkey, chicken and pork varieties – as well as an assortment of chicken-based dishes, olives, savory products and salads through its T&L Creative Salads and Olive Branch subsidiaries. The Company’s products are sold in over 45,000 locations nationwide, including at regional delis and well-known retailers such as Sam’s Club, ALDI Markets, Schnuck Markets, Whole Foods, Publix, ShopRite, Stop & Shop, Costco and Albertsons – as well as through national distributors such as Sysco and United Natural Foods. The Company also maintains a direct-to-consumer presence 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, 2022 and other filings made by the Company with the Securities and Exchange Commission.
Investor Relations Contact:
Lucas A. Zimmerman
Director
MZ Group - MZ North America
(949) 259-4987
MMMB@mzgroup.us
www.mzgroup.us
MamaMancini’s Holdings, Inc.
Consolidated Balance Sheets
| January 31, 2022 | January 31, 2021 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 850,598 | $ | 3,190,560 | ||||
| Accounts receivable, net | 7,627,717 | 3,973,793 | ||||||
| Inventories | 2,890,793 | 1,195,211 | ||||||
| Prepaid expenses | 269,209 | 519,887 | ||||||
| Total current assets | 11,638,317 | 8,879,451 | ||||||
| Property and equipment, net | 3,678,532 | 2,963,602 | ||||||
| Intangibles, net | 1,984,979 | 87,639 | ||||||
| Goodwill | 8,633,334 | |||||||
| Operating lease right of use assets, net | 3,596,317 | 1,352,483 | ||||||
| Deferred tax asset | 488,501 | 744,973 | ||||||
| Deposits | 52,249 | 20,177 | ||||||
| Total Assets | $ | 30,032,229 | $ | 14,048,325 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Liabilities: | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 6,479,140 | $ | 3,707,111 | ||||
| Term loan, net of debt discount of $57,771 and $0, respectively | 1,235,333 | - | ||||||
| Operating lease liability | 292,699 | 147,684 | ||||||
| Finance leases payable | 218,039 | 190,554 | ||||||
| Promissory note – related party | 759,917 | - | ||||||
| Total current liabilities | 8,985127 | 4,045,349 | ||||||
| Line of credit | 765,000 | - | ||||||
| Operating lease liability – net of current | 3,339,255 | 1,218,487 | ||||||
| Finance leases payable – net of current | 376,132 | 474,743 | ||||||
| Promissory note – related party, net of current | 2,250,000 | - | ||||||
| Term loan – net of current | 6,206,896 | - | ||||||
| Total long-term liabilities | 12,937,283 | 1,693,230 | ||||||
| Total Liabilities | 21,922,411 | 5,738,579 | ||||||
| Commitments and contingencies (Note 12) | ||||||||
| Stockholders’ Equity: | ||||||||
| Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of January 31, 2022 and 2021, 0 and 0 shares outstanding as of January 31, 2022 and 2021 | - | - | ||||||
| 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; 35,758,792 and 35,603,731 shares issued and outstanding as of January 31, 2022 and 2021 | 359 | 357 | ||||||
| Additional paid in capital | 20,587,789 | 20,535,793 | ||||||
| Accumulated deficit | (12,328,830 | ) | (12,076,904 | ) | ||||
| Less: Treasury stock, 230,000 shares at cost, respectively | (149,500 | ) | (149,500 | ) | ||||
| Total Stockholders’ Equity | 8,108,818 | 8,309,746 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 30,032,229 | $ | 14,048,325 | ||||
MamaMancini’s Holdings, Inc.
Consolidated Statements of Operations
| For the Years Ended January 31, | ||||||||
| 2022 | 2021 | |||||||
| Sales-net of slotting fees and discounts | $ | 47,083,740 | $ | 40,758,605 | ||||
| Costs of sales | 35,229,867 | 28,019,296 | ||||||
| Gross profit | 11,853,873 | 12,739,309 | ||||||
| Operating expenses: | ||||||||
| Research and development | 120,692 | 110,713 | ||||||
| General and administrative | 11,650,414 | 9,150,748 | ||||||
| Total operating expenses | 11,771,106 | 9,261,461 | ||||||
| Income from operations | 82,767 | 3,477,848 | ||||||
| Other Income (Expense) | ||||||||
| Interest | (73,487 | ) | (137,751 | ) | ||||
| Amortization of debt discount | (2,438 | ) | (17,864 | ) | ||||
| Other income | 37,704 | - | ||||||
| Total other income (expense) | (38,221 | ) | (155,615 | ) | ||||
| Net income before income tax provision | 44,546 | 3,322,233 | ||||||
| Income tax (expense) benefit | (296,472 | ) | 744,973 | |||||
| Net (loss) income | $ | (251,926 | ) | $ | 4,067,206 | |||
| Net (loss) income per common share | ||||||||
| – basic | $ | (0.01 | ) | $ | 0.12 | |||
| – diluted | $ | (0.01 | ) | $ | 0.12 | |||
| Weighted average common shares outstanding | ||||||||
| – basic | 35,702,197 | 33,503,208 | ||||||
| – diluted | 35,702,197 | 34,016,581 | ||||||
MamaMancini’s Holdings, Inc.
Consolidated Statements of Cash Flows
| For the Year Ended January 31, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | (251,926 | ) | $ | 4,067,206 | |||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
| Depreciation | 779,442 | 663,001 | ||||||
| Amortization of debt discount | 2,437 | 17,864 | ||||||
| Amortization of right of use assets | 190,798 | 138,311 | ||||||
| Amortization of intangibles | 43,660 | - | ||||||
| Share-based compensation | 32,918 | 52,895 | ||||||
| Change in deferred tax asset | 296,472 | (744,973 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (938,409 | ) | (245,906 | ) | ||||
| Inventories | (474,527 | ) | 51,206 | |||||
| Prepaid expenses | 254,220 | (267,619 | ) | |||||
| Security deposits | (32,072 | ) | - | |||||
| Accounts payable and accrued expenses | 1,175,677 | 99,249 | ||||||
| Operating lease liability | (168,849 | ) | (132,694 | ) | ||||
| Net Cash Provided by Operating Activities | 909,841 | 3,698,540 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Cash paid for fixed assets | (862,415 | ) | (419,373 | ) | ||||
| Cash paid for intangible assets | - | (32,567 | ) | |||||
| Acquisition of companies – net of cash acquired | (10,408,542 | ) | - | |||||
| Net Cash Used in Investing Activities | (11,270,957 | ) | (451,940 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Repayment of related party notes payable | - | (641,844 | ) | |||||
| Borrowings from term loan | 7,500,000 | - | ||||||
| Cash paid for financing fees | (63,750 | ) | - | |||||
| Repayments of term loan | - | (441,663 | ) | |||||
| Proceeds from promissory note | - | 330,505 | ||||||
| Repayment of promissory note | - | (330,505 | ) | |||||
| Borrowings (repayments) of line of credit, net | 765,000 | (2,997,348 | ) | |||||
| Repayment of capital lease obligations | (199,176 | ) | (156,450 | ) | ||||
| Proceeds from exercise of options | 19,080 | 14,400 | ||||||
| Proceeds from exercise of warrants | - | 3,773,182 | ||||||
| Net Cash Provided by (Used in) Financing Activities | 8,021,154 | (449,723 | ) | |||||
| Net Increase (Decrease) in Cash | (2,339,962 | ) | 2,796,877 | |||||
| Cash - Beginning of Period | 3,190,560 | 393,683 | ||||||
| Cash - End of Period | $ | 850,598 | $ | 3,190,560 | ||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||
| Cash Paid During the Period for: | ||||||||
| Income taxes | $ | - | $ | - | ||||
| Interest | $ | 52,221 | $ | 174,735 | ||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Operating right of use asset additions | $ | 2,457,502 | $ | - | ||||
| Finance lease asset additions | $ | 128,050 | $ | 401,387 | ||||
| Acquisition of software via contract liability | $ | - | $ | 55,072 | ||||
| Related party loan to finance acquisition | $ | 3,000,000 | $ | - | ||||
