MMMB MamaMancinis Holdings Inc

MamaMancini's Holdings, Inc. (NASDAQ: MMMB), a leading national marketer and manufacturer of fresh Deli prepared foods, has reported its financial results for the fourth quarter and fiscal year ended January 31, 2023.

Financial Summary:

		Three Months Ended Jan. 31,												Fiscal Year Ended Jan. 31,
$ in millions		2023				2022				% Increase				2023				2022				% Increase
Revenues		$	22.8			$	13.9				64	%		$	93.2			$	47.1				98	%
Gross Profit		$	6.4			$	2.6				147	%		$	19.4			$	11.9				64	%
Operating Expenses		$	4.5			$	4.0				14	%		$	16.6			$	11.8				41	%
Net Income (Loss)		$	1.8			$	(1.3	)			241	%		$	2.3			$	(0.3	)			1,014	%
Earnings per Share (Diluted)		$	0.06			$	(0.04	)			250	%		$	0.06			$	(0.01	)			700	%
Adj. EBITDA (non-GAAP)		$	2.3			$	(0.8	)			374	%		$	4.3			$	1.1				282	%

Key Fourth Quarter Fiscal 2023 & Subsequent Operational Highlights:

• Hired 20-year supply chain veteran Joselina Peralta as Chief Procurement Officer and SVP of End to End Supply Chain, with the objective of optimizing procurement activities across both manufacturing facilities to further enhance the Company’s gross margin profile.
• Strengthened corporate governance with the appointment of seasoned human resources executive Meghan Henson as well as digital-first operations executive Shirley Romig to the Board of Directors, who each bring more than 20 years of experience in their respective fields.
• Invited to present at leading investor conferences nationally, including the 35th Annual ROTH Conference and the Diamond Equity Research Emerging Growth Invitational – in addition to hosting a successful in-person Investor Day in East Rutherford, NJ.
• Continued to expand the breadth and depth of the business, both from new customers as well as from an average items carried perspective in existing customers, with new grocery and club store customers in the West and Midwest, including opening new regions with a major club store chain and selling additional items into another major club store chain.

Management Commentary

“The fourth quarter of fiscal 2023 was underscored by continuous improvement in our gross margin profile – which drove strong sequential net income growth, even with the seasonality we typically see in the fourth quarter,” said Adam L. Michaels, Chairman and CEO of MamaMancini’s. “These initial improvements in procurement, manufacturing and logistics are just the beginning – which when paired with our continued efforts to sell more items into our existing retailer partners through the pending buildout of our sales and marketing capabilities in the coming months – positions us to continue to gain market share in a highly profitable manner.

“Since I took the role of CEO, the team has been highly focused on the continuous foundational improvement of our 3 ‘Cs’ – namely our Cost, Controls and Culture. New approaches to cost management have driven procurement and logistics savings, driving a fourth quarter gross margin improvement of over 950 basis points year-over-year and 260 basis points sequentially – enabling us to achieve $1.8 million of net income and pay down $1.3 million in debt in the fourth quarter alone.

“Given these tailwinds, I believe we can improve our normalized gross margin profile from the mid-20% range to the upper 20% range this year. Longer term, considering the recent appointment of our new Chief Procurement Officer, the strength of our new Logistics Director, and the continuous optimization of our operations, we could return to a gross margin profile north of 30%. While we are currently targeting mid-single-digit net income margins, I firmly believe that over the long term we can improve this figure to approximately 10% with adjusted EBITDA margins in the teens percentage range.

“On the corporate governance front, we recently strengthened our Board with the appointment of two qualified independent directors. Meghan Henson’s deep knowledge and experience in the human resources field will be an invaluable asset to the Company as we evolve into a truly national platform company. Shirley Romig’s corporate governance skills and experience building and leading public companies through various stages of maturity using digital-first social media strategies further strengthens our Board and will enable us to better connect with new demographics.

“Our aspiration is to build upon this strong foundation to realize sequential increases in profitability throughout fiscal 2024 – enabled by increasing average items carried, penetrating new retailers and further strengthening our margin profile. Accomplishing this through the impending buildout of our sales and marketing organization, paired with future acquisitions to further build our in-house capabilities and product suite, will allow us to become a first-of-kind national deli solutions company – all with the goal of delivering sustainable, long-term value to my fellow shareholders,” concluded Michaels.

Fourth Quarter and Fiscal 2023 Financial Results

Revenue for the fourth quarter of fiscal 2023 increased 64% to $22.8 million, as compared to $13.9 million in the same year-ago quarter. Revenue for fiscal 2023 increased 98% to a $93.2 million, as compared to $47.1 million in the prior year. The increase is attributable to strong organic growth across all divisions – chiefly through cross selling – as well as by inorganic growth through the acquisition of T&L and Olive Branch.

Gross profit increased 147% to $6.4 million, or 28.2% of total revenues, in the fourth quarter of fiscal 2023, as compared to $2.6 million, or 18.7% of total revenues, in the same year-ago quarter. Gross profit increased 64% to $19.4 million, or 20.8% of total revenues, in fiscal 2023, as compared to $11.9 million, or 25.2% of total revenues, in the prior year. The increase in gross margin in the fourth quarter was attributable to the normalization of commodity costs, successful pricing actions and improvements in operational efficiencies across the organization. The Company continues to identify procurement and logistics efficiencies and cost savings through stronger buying power created through the acquisitions of T&L Creative Salads and Olive Branch.

Operating expenses totaled $4.5 million in the fourth quarter of fiscal 2023, as compared to $4.0 million in the same year-ago quarter. As a percentage of sales, operating expenses decreased in the fourth quarter of 2023 to 19.9% from 28.8%. Operating expenses totaled $16.6 million in fiscal 2023, as compared to $11.8 million in fiscal 2022. As a percentage of sales, operating expenses decreased in fiscal 2023 to 17.8% of sales, as compared to 25.0% in the prior year. Operating expenses, as a percentage of sales, benefited from synergies created through the acquisitions of T&L and Olive Branch.

Net income for the fourth quarter of fiscal 2023 was $1.8 million, or $0.06 per diluted share, as compared to a net loss of $1.3 million, or ($0.04) per diluted share, in the same year-ago quarter. Net income for fiscal 2023 was $2.3 million, or $0.06 per diluted share, as compared to net loss of $0.3 million, or ($0.01) per diluted share, in the prior year. The fourth quarter was impacted by a one-time book-to-tax adjustment that improved net income by approximately $0.5 million. Without this one-time benefit, net income still saw robust sequential improvement to $1.3 million, representing net income margins in the high 5% range, in-line with the Company’s expectation in the mid-single-digit range.

Adjusted EBITDA, a non-GAAP term, increased to $2.3 million for the fourth quarter of fiscal 2024, as compared to ($0.8) million in the same year-ago quarter. Adjusted EBITDA increased to $4.3 million in fiscal 2023, as compared to $1.1 million in the prior year.

Cash and cash equivalents as of January 31, 2023 were $4.4 million, as compared to $0.9 million as of January 31, 2022. The increase in cash and cash equivalents was driven by $2.3 million in cash flow from operations in the fourth quarter of fiscal 2023, $1.3 million of which was used to pay down the Company’s long-term debt, bringing the total debt retired in the second half of fiscal 2023 to $3.2 million.

Conference Call

Management will host an investor conference call at 4:30 p.m. Eastern time today to discuss the Company’s fourth quarter & fiscal year 2023 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:

Q4 & FY2023 Earnings Conference CallDate: Wednesday, April 26, 2023 Time: 4:30 p.m. Eastern time U.S. Dial-in: 1-877-451-6152International Dial-in: 1-201-389-0879Conference ID: 13737915Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1608685&tp_key=65a4e59ad1

Please join at least five minutes before the start of the call to ensure timely participation.

A playback of the call will be available through Friday, May 26, 2023. To listen, please call 1-844-512-2921 within the United States and Canada or 1-412-317-6671 when calling internationally, using replay pin number 13737915. A webcast replay will also be available using the webcast link above.

About MamaMancini’s Holdings, Inc.

MamaMancini's Holdings, Inc. (NASDAQ: MMMB) is a leading marketer and manufacturer of prepared foods with over 45,000 product placements in grocery, mass, club and convenience stores nationally. The Company’s broad product portfolio, born from a rich history in Italian foods, now consists of a variety of high quality, fresh, clean and easy to prepare foods to address the needs of both our consumers and retailers. Our vision is to become a one-stop-shop deli solutions platform, leveraging vertical integration and a diverse family of brands to offer a wide array of prepared foods to meet the changing demands of the modern consumer. For more information, please visit www.mamamancinis.com.

Use of Non-GAAP Financial Measures

This press release includes the following non-GAAP measure – adjusted EBITDA, which is not a measure of financial performance under GAAP and should not be considered as an alternative to net income as a measure of financial performance. The company believes this non-GAAP measure, when considered together with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to the company’s results of operations. However, this non-GAAP measure has significant limitations in that it does not reflect all the costs and other items associated with the operation of the company’s business as determined in accordance with GAAP. In addition, the company’s non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies. Therefore, investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, measures of financial performance in accordance with GAAP. For a definition and reconciliation of EBITDA to net income, its corresponding GAAP measure, please see the reconciliation table shown in this press release below.

US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION(Unaudited)

	THREE MONTHS ENDED								Fiscal Year Ended
	January 31,								January 31,
		2023		2022						2023		2022
Net Income (Loss)	$	1,822,626			$	(1,309,920	)		$	2,268,604			$	(251,926	)
Depreciation		242,008				207,204				920,718				779,442
Amortization of Debt Discount		12,451				2,437				22,121				2,437
Amortization of Right of Use Assets		4,881				27,657				16,680				190,798
Amortization of Intangibles		115,183				43,660				482,469				43,660
Taxes		(96,975	)			94,841				(9,104	)			296,472
Interest		186,730				100,197				633,889				73,487
Adjusted EBITDA (Non-GAAP)	$	2,286,904			$	(833,924	)		$	4,337,400			$	1,136,392

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, 2023 and other filings made by the Company with the Securities and Exchange Commission.

Investor Relations Contact:Lucas A. ZimmermanDirectorMZ Group - MZ North America(949) 259-4987MMMB@mzgroup.us www.mzgroup.us

MamaMancini’s Holdings, Inc.Consolidated Balance Sheets

		January 31, 2023				January 31, 2022
Assets:
Current Assets:
Cash		$	4,378,383			$	850,598
Accounts receivable, net			6,832,046				7,627,717
Inventories, net			3,635,881				2,890,793
Prepaid expenses and other current assets			828,391				269,209
Total current assets			15,674,701				11,638,317
Property and equipment, net			3,423,096				3,678,532
Intangibles, net			1,502,510				1,984,979
Goodwill			8,633,334				8,633,334
Operating lease right of use assets, net			3,236,690				3,596,317
Deferred tax asset			717,556-				448,501
Equity method investment			1,343,486				-
Deposits			53,819				52,249
Total Assets		$	34,587,320			$	30,032,229
Liabilities and Stockholders’ Equity:
Liabilities:
Current Liabilities:
Accounts payable and accrued expenses		$	9,065,389			$	6,479,140
Term loan, net of debt discount of $60,082 and $57,771, respectively			1,491,642				1,235,333
Operating lease liability			391,802				292,699
Finance leases payable			182,391				218,039
Promissory note – related party			750,000				759,917
Total current liabilities			11,881,224				8,985,128
Line of credit			890,000				765,000
Operating lease liability – net of current			2,897,205				3,339,255
Finance leases payable – net of current			248,640				376,132
Promissory note – related party, net of current			1,500,000				2,250,000
Term loan – net of current			4,655,173				6,206,896
Total long-term liabilities			10,191,018				12,937,283
Total Liabilities			22,072,242				21,922,411
Commitments and contingencies (Note 10)
Stockholders’ Equity:
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of January 31, 2023 and January 31, 2022, 0 shares outstanding as of January 31, 2023 and January 31, 2022			-				-
Series B Preferred stock, $0.00001 par value; 200,000 shares authorized; 54,600 and 0 issued and outstanding as of January 31, 2023 and January 31, 2022			-				-
Preferred stock, $0.00001 par value; 19,680,000 shares authorized; no shares issued and outstanding			-				-
Common stock, $0.00001 par value; 250,000,000 shares authorized; 36,317,857 and 35,758,792 shares issued and outstanding as of January 31, 2023 and January 31, 2022			364				359
Additional paid in capital			22,724,440				20,587,789
Accumulated deficit			(10,060,026	)			(12,328,830	)
Less: Treasury stock, 230,000 shares at cost			(149,500	)			(149,500	)
Total Stockholders’ Equity			12,515,078				8,109,818
Total Liabilities and Stockholders’ Equity		$	34,587,320			$	30,032,229

MamaMancini’s Holdings, Inc.Consolidated Statements of Operations

		For the Years EndedJanuary 31,
		2023				2022
Sales-net of slotting fees and discounts		$	93,187,621			$	47,083,740
Costs of sales			73,769,359				35,229,867
Gross profit			19,418,262				11,853,873
Operating expenses:
Research and development			135,141				120,692
General and administrative			16,461,467				11,650,414
Total operating expenses			16,596,608				11,771,106
Income from operations			2,821,654				82,767
Other income (expenses)
Interest			(633,889	)			(73,487	)
Amortization of debt discount			(22,121	)			(2,438	)
Other income			2,648				37,704
Total other income (expenses)			(653,362	)			(38,221	)
Net income before income tax provision and income from equity method investment			2,168,292				44,546
Income from equity method investment			143,486				-
Income tax provision			(9,104	)			(296,472	)_
Net income (loss)			2,302,674				(251,926	)
Less: series B preferred dividends			(34,070	)			-
Net income (loss) available to common stockholders			2,268,604			$	(251,926	)
Net income (loss) per common share
– basic		$	0.06			$	(0.01	)
– diluted		$	0.06			$	(0.01	)
Weighted average common shares outstanding
– basic			36,093,858				35,702,197
– diluted			36,494,178				35,702,197

MamaMancini’s Holdings, Inc.Consolidated Statements of Cash Flows

		For the Years Ended January 31,
		2023					2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	2,302,674				$	(251,926	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			920,718					779,442
Provision for doubtful accounts			233,000					-
Amortization of debt discount			22,121					2,437
Amortization of right of use assets			16,680					190,798
Amortization of intangibles			482,469					43,660
Share-based compensation			110,006					32,918
Change in deferred tax asset			(271,183	)				296,472
Income from equity method investment			(143,486		)			-
Changes in operating assets and liabilities:
Accounts receivable			562,671					(938,409		)
Inventories			(745,088		)			(474,527		)
Prepaid expenses			(174,460		)			254,220
Security deposits			(1,570		)			(32,072		)
Accounts payable and accrued expenses			2,191,610					1,175,677
Operating lease liability			-					(168,849		)
Net Cash Provided by Operating Activities			5,506,162					909,841
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for fixed assets			(593,214		)			(862,415		)
Cash paid for equity method investment			(500,000		)			-
Acquisition of companies – net of cash acquired			-					(10,408,542		)
Net Cash (Used in) Investing Activities			(1,093,214		)			(11,270,957		)
								-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from preferred stock offering			1,365,000					-
Payment of stock offering costs			(64,600		)			-
Borrowings from term loan			-					7,500,000
Cash paid for financing fees			-					(63,750		)
Repayment of term loan			(1,317,535		)			-
Borrowings of line of credit, net			125,000					765,000
Repayment of term loan - related party			(750,000		)			-
Repayment of finance lease obligations			(235,208		)			(199,176		)
Payment of Series B Preferred dividends			(34,070		)			-
Proceeds from exercise of options			26,250					19,080
Net Cash (Used in) Provided by Financing Activities			(885,163		)			8,021,154
Net Increase (Decrease) in Cash			3,527,785					(2,339,962		)
Cash - Beginning of Period			850,598					3,190,560
Cash - End of Period		$	4,378,383				$	850,598
SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income taxes		$	9,170				$	-
Interest		$	633,827				$	52,221
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Finance lease asset additions		$	72,068				$	128,050
Operating lease asset additions		$	-				$	2,457,502
Related party loan to finance acquisition		$	-				$	3,000,000
Non-cash consideration paid in common stock for equity method investment		$	700,000				$	-
Non-cash deposits on prepaid additions		$	384,722				$	-