MamaMancini's Reports Second Quarter Fiscal Year 2018 Financial
Results
Q2 Fiscal 2018 Revenue Up 69% over prior year, Topping $7
million; Q2 2018 Net Income: $24,000 vs. Q2 2017 Net Loss of
$(277,000); Company reports 4th consecutive profitable quarter; Pro
Forma Cash EBITDA, including pro forma results from pending
consolidation of Joseph Epstein Foods Enterprise, Inc., reaches
record $635,000 in Q2
EAST RUTHERFORD, NJ-(Marketwired - Sep 13, 2017) - MamaMancini's
Holdings, Inc. (the "Company" or "MamaMancini's") (OTCQB: MMMB), a
marketer of specialty pre-prepared, frozen and refrigerated all
natural food products (as defined by the United States Department
of Agriculture), today announced financial results for the second
quarter of fiscal year 2018, ended July 30, 2017.
Second Quarter Highlights:
- Second quarter of fiscal year 2018 revenue increased 69% to
$7.0 million compared to $4.1 million in prior year period.
- Net income for the second quarter was $24,000 versus net loss
of $(277,000) in prior year period; a $301,000 improvement.
- Net loss available to common stockholders was $(5,000), or
$0.00 per diluted share, during the second quarter of fiscal 2018,
compared to a net loss of $(324,000), or $(0.01) per diluted share
in the same quarter last year.
- Cash EBITDA, a non-GAAP financial metric (please refer to
Non-GAAP Financial Measures paragraph below), for the second
quarter was $377,000 compared to $145,000 in the second quarter of
fiscal 2017.
- Company has sold approximately 40,600 SKU's in 11,900 retail
and grocery locations at July 31, 2017 as compared to approximately
36,000 SKU's in 11,400 retail and grocery locations at July 31,
2016.
- Based on preliminary financial statements provided to the
Company by Joseph Epstein Foods, Inc. ("JEFE") (which are subject
to their audit and final due diligence), Pro forma Cash EBITDA
including JEFE results on a pro forma consolidated basis (a
non-GAAP financial metric-please refer to Non-GAAP Financial
Measures paragraph below) for the second quarter would have been
approximately $635,000, representing an increase of approximately
$258,000 over the Company's reported Cash EBITDA on a standalone
basis. Please see paragraph below concerning the Pro Forma
results.
Six Months Highlights:
- First six months of fiscal year 2018 revenue increased 53% to
$12.4 million compared to $8.1 million in prior year period.
- Net income for the six months period was $153,000 versus net
loss of $(503,000) in prior year period; a $656,000
improvement.
- Net income available to common stockholders was $76,000, or
$0.00 per diluted share, compared to a net loss of $(614,000), or
$(0.02) per diluted share in the same quarter last year.
- Cash EBITDA, a non-GAAP financial metric (please refer to
Non-GAAP Financial Measures paragraph below), for the six months
period was $890,000, an increase of 161% when compared to $341,000
in the same period of fiscal 2017.
- Based on preliminary financial statements provided to the
Company by Joseph Epstein Foods, Inc. ("JEFE") (which are subject
to their audit and final due diligence), Pro forma Cash EBITDA
including JEFE results on a pro forma consolidated basis (a
non-GAAP financial metric-please refer to Non-GAAP Financial
Measures paragraph below) for the first six months of fiscal year
2018 would have been approximately $1,185,000, representing an
increase of nearly $295,000 over the Company's reported Cash EBITDA
on a standalone basis. Please see paragraph below concerning the
Pro Forma results.
- Cash flow from operating activities was $389,000 compared to
$(23,000) in the year ago quarter.
Carl Wolf, Chief Executive Officer of MamaMancini's, commented,
"The second quarter was outstanding from a revenue perspective;
continuing the growth trajectory of recent quarters. This growth
stems directly from our strategy of focusing on selling our
products into the prepared foods, ready to eat meals and sandwich
shop area located on fresh foods perimeter of the retail grocery
store. Progressive retail stores are looking to take advantage of
the growing consumer trend toward a broad array of delicious,
nutritious, all-natural and easy to prepare products. As a result,
we have been able to sell into higher volume per location accounts
over the traditional pre-packaged retailer merchandising. We
believe this trend is accelerating as evidenced by the recent
acquisition of Whole Foods by Amazon."
Mr. Wolf continued, "The rapid growth we are currently
experiencing has required the acquisition of new equipment and
additional processes to meet current demand; which is having a
moderate impact on our gross profit and operating margins
year-to-date. We expect margins to move back up to more traditional
levels as we move through the second half of the year. Also during
the quarter, we signed a letter of intent to acquire the primary
manufacturer, of our products, Joseph Epstein Foods Enterprise
("JEFE"), on a non-cash basis. Based upon preliminary information
received from JEFE (subject to completion of due diligence and
audit), we estimate that the integration of our sole supplier will
increase our gross profit margin and profits by $1.5 million or
more in the next 12 months and believe that the acquisition will
assure a reliable source of supply for the Company for years to
come.
"As MamaMancini's continues on this growth trajectory, it became
clear to us that the combination of the two entities would secure
manufacturing capacity for the company's products and, as a result
of operating efficiencies, be immediately accretive to our earnings
and thereby reward our shareholders. We anticipate closing this
transaction in early November 2017. This acquisition involves no
cash or stock outlay." Please see the Company's SEC filing on Form
8-K on September 11, 2017 for further details.
Mr. Wolf concluded, "It is an exciting time at MamaMancini's as
the strategic direction we put in place is coming to fruition. We
have now reported profitability in each of the last four
consecutive quarters and our revenue growth is accelerating.
Looking ahead, our goal is to get to a $40 million annualized sales
run rate, which is anticipated before the end of the current fiscal
year. Our focus right now is execution, making sure we can deliver
our products on a consistent basis and meet current customer
demand. We are excited with the opportunities ahead."
Second Quarter 2018 Results Sales, net of slotting fees and
discounts, were $7.0 million for the second quarter of fiscal 2018,
a 69% increase compared to $4.1 million reported in the second
quarter of fiscal 2017. The Company has sold approximately 40,600
SKU's in 11,900 retail and grocery locations at July 31, 2017 as
compared to approximately 36,000 SKU's in 11,400 retail and grocery
locations at July 31, 2016. Gross profit for the second quarter of
fiscal 2018 was $2.0 million, or 29% of sales, compared to $1.4
million, or 33% of sales, in the year ago period. Operating income
for the second quarter of fiscal 2018 was $207,000, compared to an
operating loss of $(109,000) in the second quarter of fiscal 2017.
Net income for the second quarter of fiscal 2018 was $24,000,
compared to a net loss of $(277,000) in the second quarter of
fiscal 2017.
Six Months Fiscal 2018 Results Sales, net of slotting fees and
discounts, were $12.4 million for the first six months of fiscal
2018, a 53% increase compared to $8.1 million reported in the prior
year period. Gross profit for the first six months of fiscal 2018
was $3.9 million, or 32% of sales, compared to $2.8 million, or 35%
of sales, in the year ago period. Operating income for the first
six months of fiscal 2018 was $524,000, compared to an operating
loss of $(164,000) in the first six months of fiscal 2017. Net
income for the first six months of fiscal 2018 was $153,000,
compared to a net loss of $(503,000) in the first six months of
fiscal 2017.
Non-GAAP Financial Measures The Company uses Cash EBITDA as a
non-GAAP financial measure. The Company defines Cash EBITDA as
earnings before income taxes, depreciation and amortization plus
any non-cash stock payments for expenses. The Company believes that
the use of Cash EBITDA is useful to investors and other users of
its financial statements in evaluating the Company's operating
performance because it provides them with an additional tool to
compare business performance across companies and across periods.
The Company uses Cash EBITDA in conjunction with traditional GAAP
operating performance measures as part of its overall assessment of
its performance, for planning purposes, including the preparation
of its annual operating budget, and to evaluate the effectiveness
of its business strategies. Management does not place undue
reliance on Cash EBITDA as its only measure of operating
performance. Cash EBITDA should not be considered as a substitute
for other measures of financial performance reported in accordance
with GAAP.
Pro Forma Results including Joseph Epstein Foods Enterprise,
Inc. ("JEFE") The Pro Forma results which include the consolidation
of the results of JEFE are based on preliminary financial
information that the Company has received from JEFE. These
financial results are subject to changes from their audit and due
diligence prior to the consolidation which is expected about
November 1, 2017.
Conference Call The Company has scheduled a conference call for
Thursday, September 14, 2017 at 9:00 a.m. ET, to review the
results.
Interested parties may participate on the conference call by
dialing (844) 889-4326 or (412) 317-9264. A replay of the
conference call will be available by dialing (877) 344-7529 or
(412) 317-0088, confirmation code 10112126, through September 20,
2017.
About MamaMancini's MamaMancini's is a marketer and distributor
of a line of beef meatballs and turkey meatballs all with sauce,
five cheese stuffed beef and turkey meatballs all with sauce,
original beef and turkey meatloaves, chicken parmesan, stuffed
peppers and other similar Italian cuisine products. The Company's
sales have been growing on a consistent basis as the Company
expands its distribution channel, which includes major retailers
and distributors such as Costco, Publix, Shop Rite, Jewel, Save
Mart, Lucky's, Lunds and Byerlys, SuperValu, Safeway, Albertsons,
SpartanNash, Bashas, Whole Foods Market, Hy-Vee, Shaw's, Kings,
Roche Bros., Key Foods, Stop & Shop, Giant, Giant Eagle,
Foodtown, Sam's Club, Kroger, Shoppers,, King Kullen, Lowes,
Central Market, Weis Markets, Ingles, Food City, The Fresh Market.
Sysco, Burris Foods, and C&S. The Company sells a variety of
its products on air and on line on QVC, the world's largest direct
to consumer marketer.
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, 2017 and other filings made by the
Company with the Securities and Exchange Commission.
Financial Tables to Follow
|
|
|
|
MamaMancini's Holdings, Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
July 31, 2017
|
|
|
January 31, 2017
|
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
639,454
|
|
|
$
|
666,580
|
|
Accounts receivable, net
|
|
|
3,064,576
|
|
|
|
1,817,820
|
|
Inventories
|
|
|
235,207
|
|
|
|
443,623
|
|
Prepaid expenses
|
|
|
143,188
|
|
|
|
135,747
|
|
Due from manufacturer - related party
|
|
|
1,597,518
|
|
|
|
2,079,708
|
|
Total current assets
|
|
|
5,679,943
|
|
|
|
5,143,478
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
1,299,183
|
|
|
|
1,175,508
|
|
|
|
|
|
|
|
|
|
|
Deposit on machinery and equipment
|
|
|
493,855
|
|
|
|
-
|
|
Total Assets
|
|
$
|
7,472,981
|
|
|
$
|
6,318,986
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
891,609
|
|
|
$
|
484,752
|
|
Line of credit, net
|
|
|
2,454,151
|
|
|
|
1,363,145
|
|
Term loan
|
|
|
140,004
|
|
|
|
140,004
|
|
Note payable - net
|
|
|
2,126,736
|
|
|
|
1,401,906
|
|
Total current liabilities
|
|
|
5,612,500
|
|
|
|
3,389,807
|
|
|
|
|
|
|
|
|
|
|
Term loan - net of current
|
|
|
443,326
|
|
|
|
513,328
|
|
Note payable - net of current portion
|
|
|
-
|
|
|
|
1,298,819
|
|
Notes payable - related party
|
|
|
117,656
|
|
|
|
117,656
|
|
Total long-term liabilities
|
|
|
560,982
|
|
|
|
1,929,803
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
6,173,482
|
|
|
|
5,319,610
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity:
|
|
|
|
|
|
|
|
|
Series A Preferred stock, $0.00001 par value; 120,000 shares
authorized; 23,400 shares issued and outstanding, respectively
|
|
|
-
|
|
|
|
-
|
|
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;
31,503,662 and 27,810,717 shares issued and outstanding,
respectively
|
|
|
315
|
|
|
|
278
|
|
Additional paid in capital
|
|
|
16,064,056
|
|
|
|
15,825,029
|
|
Common stock subscribed, $0.00001 par value; 66,667 shares,
respectively
|
|
|
1
|
|
|
|
1
|
|
Accumulated deficit
|
|
|
(14,615,373
|
)
|
|
|
(14,676,432
|
)
|
|
|
|
|
|
|
|
|
|
Less: Treasury stock, 230,000 shares, respectively
|
|
|
(149,500
|
)
|
|
|
(149,500
|
)
|
Total Stockholders' Equity
|
|
|
1,299,499
|
|
|
|
999,376
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
7,472,981
|
|
|
$
|
6,318,986
|
|
|
|
|
|
MamaMancini's Holdings, Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(Unaudited)
|
|
|
|
|
|
For the Three Months Ended July 31,
|
|
|
For the Six Months Ended July 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales-net of slotting fees and
|
|
$
|
7,005,434
|
|
|
$
|
4,138,280
|
|
|
$
|
12,362,735
|
|
|
$
|
8,062,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of Sales
|
|
|
4,995,088
|
|
|
|
2,772,966
|
|
|
|
8,452,811
|
|
|
|
5,221,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2,010,346
|
|
|
|
1,365,314
|
|
|
|
3,909,924
|
|
|
|
2,840,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
24,531
|
|
|
|
37,225
|
|
|
|
50,119
|
|
|
|
67,787
|
|
|
General and administrative
|
|
|
1,778,348
|
|
|
|
1,437,256
|
|
|
|
3,336,176
|
|
|
|
2,937,113
|
|
|
|
Total operating expenses
|
|
|
1,802,879
|
|
|
|
1,474,481
|
|
|
|
3,386,295
|
|
|
|
3,004,900
|
|
Income (loss) from operations
|
|
|
207,467
|
|
|
|
(109,167
|
)
|
|
|
523,629
|
|
|
|
(164,387
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(174,338
|
)
|
|
|
(157,949
|
)
|
|
|
(344,995
|
)
|
|
|
(319,711
|
)
|
|
Amortization of debt discount
|
|
|
(8,730
|
)
|
|
|
(9,694
|
)
|
|
|
(26,010
|
)
|
|
|
(18,819
|
)
|
|
|
Total other income (expense)
|
|
|
(183,068
|
)
|
|
|
(167,643
|
)
|
|
|
(371,005
|
)
|
|
|
(338,530
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
24,399
|
|
|
|
(276,810
|
)
|
|
|
152,624
|
|
|
|
(502,917
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: preferred dividends
|
|
|
(44,765
|
)
|
|
|
(46,800
|
)
|
|
|
(91,565
|
)
|
|
|
(111,321
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders
|
|
|
(20,366
|
)
|
|
|
(323,610
|
)
|
|
|
61,059
|
|
|
|
(614,238
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share - basic
|
|
$
|
(0.00
|
)
|
|
|
(0.01
|
)
|
|
|
0.00
|
|
|
|
(0.02
|
)
|
Net loss per common share - diluted
|
|
$
|
(0.00
|
)
|
|
|
(0.01
|
)
|
|
|
0.00
|
|
|
|
(0.02
|
)
|
Weighted average common shares outstanding - basic
|
|
|
27,947,539
|
|
|
|
27,039,199
|
|
|
|
27,880,255
|
|
|
|
26,776,279
|
|
Weighted average common shares outstanding - diluted
|
|
|
27,947,539
|
|
|
|
27,039,199
|
|
|
|
29,198,164
|
|
|
|
26,776,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MamaMancini's Holdings, Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
|
|
|
|
For the Six Months Ended
|
|
|
|
July 31, 2017
|
|
|
July 31, 2016
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
152,624
|
|
|
$
|
(502,917
|
)
|
|
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
219,205
|
|
|
|
159,703
|
|
|
|
Amortization of debt discount and debt issuance costs
|
|
|
26,011
|
|
|
|
18,819
|
|
|
|
Share-based compensation
|
|
|
147,499
|
|
|
|
352,137
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
(Increase) Decrease in:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(1,246,756
|
)
|
|
|
116,339
|
|
|
Inventories
|
|
|
208,416
|
|
|
|
(155,226
|
)
|
|
Prepaid expenses
|
|
|
(7,441
|
)
|
|
|
(43,891
|
)
|
|
Due from manufacturer - related party
|
|
|
482,190
|
|
|
|
67,918
|
|
|
Increase (Decrease) in:
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
406,857
|
|
|
|
(36,285
|
)
|
|
|
Net Cash Provided by (Used In) Operating Activities
|
|
|
388,605
|
|
|
|
(23,403
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Cash paid for fixed assets
|
|
|
(836,735
|
)
|
|
|
(204,083
|
)
|
|
|
Net Cash Used In Investing Activities
|
|
|
(836,735
|
)
|
|
|
(204,083
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Repayment of note payable
|
|
|
(600,000
|
)
|
|
|
-
|
|
Borrowings (repayments) of line of credit, net
|
|
|
1,091,006
|
|
|
|
144,810
|
|
Repayment of term loan
|
|
|
(70,002
|
)
|
|
|
(60,000
|
)
|
Repayment of promissory notes
|
|
|
-
|
|
|
|
(180,300
|
)
|
|
|
Net Cash (Used In) Provided By Financing Activities
|
|
|
421,004
|
|
|
|
(95,490
|
)
|
|
|
|
|
|
|
|
|
|
Net Decrease in Cash
|
|
|
(27,126
|
)
|
|
|
(322,976
|
)
|
|
|
|
|
|
|
|
|
|
Cash - Beginning of Period
|
|
|
666,580
|
|
|
|
587,422
|
|
|
|
|
|
|
|
|
|
|
Cash - End of Period
|
|
$
|
639,454
|
|
|
|
264,446
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTARY CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
Cash Paid During the Period for:
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
$
|
-
|
|
|
|
-
|
|
|
Interest
|
|
$
|
145,241
|
|
|
|
76,311
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for Series A Preferred dividends
|
|
$
|
91,565
|
|
|
$
|
178,314
|
|
Accrued dividends
|
|
$
|
91,565
|
|
|
$
|
64,521
|
|
Debt issuance costs included in principal balance of note
|
|
$
|
52,236
|
|
|
$
|
-
|
|
Prepaid stock-based compensation
|
|
$
|
-
|
|
|
$
|
28,125
|
|
Accrued interest reclassified to principal balance of
convertible note
|
|
|
-
|
|
|
|
270,323
|
|
Contact: Carl Wolf Chairman and CEO MamaMancini's Holdings, Inc.
Stock Symbol: MMMB 973-985-0280 www.mamamancinis.com
carl@mamamancinis.com