MamaMancini’s Reports Fourth Quarter and Fiscal Year 2023 Financial Results

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Ongoing Margin Enhancement Initiatives Sequentially Grow Gross Margins to 28.2% with $1.8 Million in Net Income in the Fourth Quarter

Company Grows Cash Position to $4.4 Million as of January 31, 2023; Concurrently Pays Down $3.2 Million in Debt in the Second Half of Fiscal 2023

EAST RUTHERFORD, NJ, April 26, 2023 (GLOBE NEWSWIRE) — 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.

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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 Call
Date: Wednesday, April 26, 2023
Time: 4:30 p.m. Eastern time
U.S. Dial-in: 1-877-451-6152
International Dial-in: 1-201-389-0879
Conference ID: 13737915
Webcast: 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. Zimmerman
Director
MZ Group – MZ North America
(949) 259-4987
[email protected]
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 Ended
January 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       $    

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