MamaMancini’s Reports Second Quarter 2023 Financial Results

MamaMancini's Holdings, Inc.

Organic Growth and Recent Acquisitions Drive 89% Increase in Q2 Fiscal 2023 Revenues to Record $22.9 Million

EAST RUTHERFORD, NJ, Sept. 14, 2022 (GLOBE NEWSWIRE) -- MamaMancini's Holdings, Inc. (NASDAQ: MMMB), a leading marketer and manufacturer of fresh, clean and easy to prepare foods, today reported its financial results for the fiscal second quarter ended July 31, 2022.

Financial Summary:

	Three Months Ended July 31,
$ in millions		2022			2021	% Change
Revenues	$	22.9		$	12.1	89.4	%
Gross Profit	$	2.7		$	3.4	-19.1	%
Operating Expenses	$	3.6		$	2.8	27.8	%
Net Income (Loss)	$	(0.7	)	$	0.4	-
Earnings per Share (Diluted)	$	(0.02	)	$	0.01	-
Adj. EBTIDA (non-GAAP)	$	(0.3	)	$	0.8	-

Key Second Quarter Fiscal 2023 Operational Highlights

• Appointed respected food industry executive Adam L. Michaels as Chief Executive Officer and member of the Board of Directors, with Carl Wolf continuing to serve as Chairman.

• Appointed experienced financial executive Anthony J. Gruber as Chief Financial Officer, effective September 19, 2022.

• Acquired a 24% minority interest in Chef Inspirational Foods with a fixed price option to purchase the remainder, representing an immediately accretive investment into a leading prepared foods sales agent, whose largest partner is MamaMancini’s subsidiary T&L Creative Salads.

• Began a convenience store market test for branded Meatballs in a Cup^™ and Meals for One with one of the largest wholesale distributors in the United States, opening an incremental sales platform for convenient, on the go, high protein snacks and meals.

• Secured new customer authorizations representing over 10,500 new spots on tier-1 retailer shelves nationwide, with initial shipments taking place from August through October 2022.

• Attended leading investor conferences nationally, including the Proactive Investors One2One Virtual Forum and the Q3 Investor Summit, with an addition registration to attend the upcoming LD Micro Main Event XV.

Management Commentary

“The second quarter was highlighted by record revenues, supported by healthy growth from our recent acquisitions, bringing us roughly in-line with Carl’s previously announced goal of a $100 million annualized sales run-rate by year-end,” said Adam L. Michaels, newly appointed CEO of MamaMancini’s. “While I started at MamaMancini’s one short week ago, the passion of our people and the difficult to replicate story of Anna “Mama” Mancini dating back to 1921 is incredible. The quality of our products and our service is recognized by our consumers and retailers. Equally, we all recognize the major areas of focus our Company needs to immediately address to improve our cost structure, corporate culture as well as operational and financial controls – enabling us to more fully realize synergies across our family of brands and enhance profitability both from a price realization and operating cost perspective.

“MamaMancini’s is building the foundations for a national Deli Solutions company that – leveraging organic growth and expansion of our existing portfolio, incremental consumer-driven innovation, and accretive near-in acquisitions to fill out the gaps – has the potential to become a one-stop-shop for prepared foods for grocery, mass, club and convenience stores. I realize this is certainly no small feat – but I am confident that, with our storied, family recipes and on-trend portfolio, we are well positioned to achieve it.

“To address the specific headwinds we faced this quarter, we have been aggressive in seeking out new ways to strengthen our firm-wide margin profile. For example, we have instituted a new pricing process that more accurately and rapidly tracks inputs costs – including commodity costs – to ensure that every single sale we make is meeting our required margin profile. In addition, we are conducting a thorough analysis of our suppliers and have already identified several areas where we have the potential to realize meaningful cost savings. We have instituted KPIs to track progress, targets to measure success, and monthly meetings to hold our teams accountable for results. We believe that these efforts, as well as incremental improvements at every level of the company, will only serve to fuel our growth and accelerate our return to profitability.

“In summary, while we saw some margin headwinds in the quarter, we are well positioned to build significant momentum in calendar year 2023 as we drive organic growth, grow the team, expand our capabilities and seek to become brilliant at the basics – all with the goal of building sustainable value for our shareholders over the long-term. I look forward to driving new momentum towards the realization of MamaMancini’s significant potential.”

Second Quarter Fiscal 2023 Financial Results

Revenue for the second quarter of fiscal 2023 increased 89.4% to $22.9 million, as compared to $12.1 million in the same year-ago quarter. The increase in revenue for the second quarter was primarily driven by the December 2021 acquisition of T&L Creative Salads, Inc. and Olive Branch LLC, as well as organic growth by adding new products with existing customers, particularly in club stores.

Gross profit totaled to $2.7 million, or 11.9% of total revenues, in the second quarter of fiscal 2023, as compared to $3.4 million, or 27.9% of total revenues, in the same year-ago quarter. The margin compression was caused by inflation of raw materials, packaging, and freight costs – which outpaced price increases – as well as lower margins in the T&L Creative Salads and Olive Branch LLC business lines, partially offset by the low overhead of the acquired businesses.

Operating expenses totaled $3.6 million in the second quarter of fiscal 2023, as compared to $2.8 million in the same year-ago quarter. As a percentage of sales, operating expenses totaled 15.6% in the second quarter of fiscal 2023, as compared to 23.1% in the same year-ago quarter. Operating expenses in the second quarter increased mainly due to transportation rate increases as well as one-time fees related to the purchase of Chef Inspirational Foods, higher professional fees and payroll related to the acquisition of T&L Creative Salads and the management of control reporting.

Net loss for the second quarter of fiscal 2023 totaled $743 thousand, or $0.02 per diluted share, as compared to a net income of $432 thousand, or $0.01 per diluted share, in the same year-ago quarter.

Adjusted EBITDA loss, a non-GAAP term, totaled $271 thousand for the second quarter of fiscal 2023, as compared to adjusted EBITDA of $829 thousand in the same year-ago quarter.

Cash and cash equivalents as of July 31, 2022 were $1.9 million, as compared to $0.9 million at January 31, 2022.

“Of note, our GAAP financial results year-to-date have reflected significant acquisition related and non-cash expenses. Taking a look at our cash flows, operating activities provided $296 thousand in net cash in the six months ended July 31, 2022. As we continue to realize synergies from the acquired companies and implement new measures company-wide to improve margins, I believe we are well positioned to return to GAAP profitability,” concluded Michaels.

Second Quarter Fiscal 2023 Earnings Conference Call

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

Q2 2023 Earnings Conference Call
Date: Wednesday, September 14, 2022
Time: 4:30 p.m. Eastern time
U.S. Dial-in: 1-844-889-4326
International Dial-in: 1-412-317-9264
Conference ID: 9017859
Webcast: MMMB Q2 2023 Earnings Conference Call

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 September 21, 2022. To listen, please call 1-877-344-7529 within the United States or 1-412-317-0088 when calling internationally and use replay pin number 9017859.

About MamaMancini’s Holdings, Inc.

MamaMancini's Holdings, Inc. (NASDAQ: MMMB) strives to become the largest marketer and distributor of fresh, clean, easy to prepare foods in North America. 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.

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 July 31,
		2022			2021
Net Income / (Loss)	$	(743,246	)	$	431,925
Depreciation	$	192,297		$	197,941
Amortization of Debt discount	$	3,015			-
Amortization of Right of Use Assets	$	113,518			48,039
Amortization of Intangibles	$	116,986		$	-
Taxes	$	(217,465	)		143,230
Interest	$	139,064			7,549
Acquisition Related Expenses	$	155,119		$	-
Adj. EBITDA (non-GAAP)	$	(271,244	)	$	828,684

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.
Condensed Consolidated Balance Sheets

		July 31, 2022				January 31, 2022
		(unaudited)
Assets:
Current Assets:
Cash		$	1,896,412			$	850,598
Accounts receivable, net			6,877,758				7,627,717
Inventories			4,193,726				2,890,793
Prepaid expenses			516,697				269,209
Total current assets			13,484,593				11,638,317
Property and equipment, net			3,617,221				3,678,532
Intangibles, net			1,754,823				1,984,979
Goodwill			8,633,334				8,633,334
Operating lease right of use assets, net			3,413,455				3,596,317
Deferred tax asset			636,581				448,501
Equity method investment in Chef Inspirational			1,218,540				-
Deposits			52,249				52,249
Total Assets		$	32,810,796			$	30,032,229
Liabilities and Stockholders’ Equity
Liabilities:
Current Liabilities:
Accounts payable and accrued expenses		$	7,649,420			$	6,479,140
Term loan, net of debt discount of $51,741 and $57,771, respectively			1,499,983				1,235,333
Operating lease liability			368,993				292,699
Finance leases payable			175,213				218,039
Promissory note – related party			813,273				759,917
Liability for Series B Preferred Shares to be issued, net			515,000				-
Total current liabilities			11,021,882				8,985,128
Line of credit			2,490,000				765,000
Operating lease liability – net of current			3,086,427				3,339,255
Finance leases payable – net of current			322,600				376,132
Promissory note – related party, net of current			2,250,000				2,250,000
Term loan – net of current			5,431,035				6,206,896
Total long-term liabilities			13,580,062				12,937,283
Total Liabilities			24,601,944				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 July 31, 2022 and January 31, 2022, 0 and 0 shares outstanding as of July 31, 2022 and January 31, 2022			-				-
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; 36,317,857 and 35,758,792 shares issued and outstanding as of July 31, 2022 and January 31, 2022			364				359
Additional paid in capital			21,326,367				20,587,789
Accumulated deficit			(12,968,379	)			(12,328,830	)
Less: Treasury stock, 230,000 shares at cost, respectively			(149,500	)			(149,500	)
Total Stockholders’ Equity			8,208,852				8,109,818
Total Liabilities and Stockholders’ Equity		$	32,810,796			$	30,032,229

MamaMancini’s Holdings, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

		For the Three Months Ended July 31,								For the Six Months Ended July 31,
		2022				2021				2022				2021
Sales-net of slotting fees and discounts		$	22,846,474			$	12,064,584			$	44,677,054			$	22,377,984
Costs of sales			20,119,862				8,695,300				38,090,179				15,664,347
Gross profit			2,726,612				3,369,284				6,586,875				6,713,637
Operating expenses:
Research and development			41,792				30,541				68,327				53,977
General and administrative			3,516,115				2,753,830				7,088,870				5,222,548
Total operating expenses			3,557,907				2,784,371				7,157,197				5,276,525
Income (loss) from operations			(831,295	)			584,913				(570,322	)			1,437,112
Other income (expenses)
Interest			(139,064	)			(7,549	)			(263,315	)			(17,979	)
Amortization of debt discount			(3,015	)			-				(6,655	)			-
Other income			2,596				-				2,596				37,704
Total other income (expenses)			(139,483	)			(7,549	)			(267,374	)			19,725
Net income (loss) before income tax provision and income from equity method investment			(970,778	)			577,364				(837,696	)			1,456,837
Income from equity method investment in Chef Inspirational			18,540				-				18,540				-
Income tax benefit (provision)			208,992				(145,439	)			179,607				(393,388	)
Net income (loss)		$	(743,246	)		$	431,925			$	(639,549	)		$	1,063,449
Net income (loss) per common share
– basic		$	(0.02	)		$	0.01			$	(0.02	)		$	0.03
– diluted		$	(0.02	)		$	0.01			$	(0.02	)		$	0.03
Weighted average common shares outstanding
– basic			35,811,087				35,697,568				35,785,719				35,660,440
– diluted			35,811,087				36,223,674				35,785,719				36,181,353

MamaMancini’s Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

		For the Six Months Ended July 31,
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income		$	(639,549	)		$	1,063,449
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			401,126				381,732
Amortization of debt discount			6,655				-
Amortization of right of use assets			182,862				91,660
Amortization of intangibles			230,156				-
Share-based compensation			12,333				786
Change in deferred tax asset			(188,080	)			391,179
Income from equity method investment in Chef Inspirational			(18,540	)			-
Paid in kind interest			53,356				-
Changes in operating assets and liabilities:
Accounts receivable			749,959				(728,920	)
Accounts receivable - other			-				(107,896	)
Inventories			(1,302,933	)			(212,403	)
Prepaid expenses			(248,113	)			71,993
Security deposits			-				(2,979	)
Accounts payable and accrued expenses			1,170,280				749,822
Operating lease liability			(176,534	)			(79,813	)
Net Cash Provided by Operating Activities			232,978				1,618,610
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for fixed assets			(305,547	)			(481,295	)
Cash paid for investment in Chef Inspirational			(500,000	)			-
Net Cash (Used in) Investing Activities			(805,547	)			(481,295	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds in advance of preferred stock offering			515,000				-
Repayment of term loan			(517,241	)			-
Borrowings of line of credit, net			1,725,000				-
Repayment of capital lease obligations			(130,626	)			(94,074	)
Proceeds from exercise of options			26,250				19,080
Net Cash Provided by (Used in) Financing Activities			1,618,383				(74,994	)
Net Increase in Cash			1,045,814				1,062,321
Cash - Beginning of Period			850,598				3,190,560
Cash - End of Period		$	1,896,412			$	4,252,881
SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income taxes		$	-			$	-
Interest		$	182,873			$	17,979
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Finance lease asset additions		$	34,268			$	-
Operating lease asset additions		$	-				347,585
Non-cash consideration paid in common stock for equity investment in Chef Inspirational		$	700,000			$	-