MamaMancini’s Reports Third Quarter 2023 Financial Results

MamaMancini's Holdings, Inc.

137% Revenue Growth and Sequential Margin Improvement Drives Return to Sustainable Profitability, Realizing $1.1 Million in Net Income and a Record $3.0 Million in Operating Cash Flow in the Third Quarter

EAST RUTHERFORD, NJ, Dec. 12, 2022 (GLOBE NEWSWIRE) -- MamaMancini's Holdings, Inc. (NASDAQ: MMMB) a leading national marketer and manufacturer of fresh Deli prepared foods, today reported its financial results for the fiscal third quarter ended October 31, 2022.

Financial Summary:

		Three Months Ended October 31,
$ in millions		2022				2021				% Change
Revenues		$	25.7			$	10.9				137	%
Gross Profit		$	6.6			$	2.7				148	%
Operating Expenses		$	5.1			$	2.7				92	%
Net Income (Loss)		$	1.1			$	(0.0	)			-
Earnings per Share (Diluted)		$	0.03			$	(0.00	)			-
Adj. EBTIDA (non-GAAP)		$	2.1			$	0.3				684	%

Key Third Quarter Fiscal 2023 Operational Highlights

• Received Four QVC^® 2022 Customer Choice Food Awards, winning awards for the fourth year in row for Most Recommended Brand, Best Meatball, Best Plant Based Food and Best Sauce.

• Launched into three new customers and drove double digit new items into existing customers – half of which were cross-selling new T&L products into legacy relationships.

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

• Attended leading investor conferences nationally, including the LD Micro Main Event XV, Proactive Investors One2One Virtual Forum and the Q3 Investor Summit.

Management Commentary

“The third quarter was marked by record revenue growth and a return to sustainable profitability, beating our previously announced goal of a $100 million annualized sales run rate by year-end a quarter ahead of expectations,” said Adam L. Michaels, CEO of MamaMancini’s. “Looking ahead, as we leverage our recent acquisitions to build the foundations of a first-of-kind national deli solutions company, my immediate-term focus will remain on the continuous foundational improvement of our ‘3Cs’ strategy – Cost, Controls and Culture.

“On the cost front, we have designed and implemented new approaches to cost management, driving noticeable improvements in procurement, manufacturing and logistics management. While the third quarter gross margins improved over 1,110 basis points as compared to the first half of the year, we believe there is even more opportunity to drive operational efficiencies across both of our facilities. Turning to controls, our newly appointed CFO Anthony Gruber has been solidifying our finance and reporting capabilities, laying the foundation for the next stage of our maturation as a public company. Our enhanced approach to costing and pricing is already driving margin expansion – we expect to continue to capture this profit growth while also reinvesting some of this margin to serve as rocket fuel for accretive marketing and trade promotion. And last, but certainly not least, we are building a company culture that is geared for and incentivizes profitable growth. Our people are at the core of what we do and hiring, promoting and retaining talent is paramount to our long-term success.

“Turning to specific wins in the third quarter, we launched into three new customers and drove double digit new items into existing customers – half of which were through cross-selling new T&L products into legacy relationships. Our goal is to grow the average items carried per store severalfold to make it easier for consumers to find our products, as well as to make our logistics more efficient. Looking ahead to the fourth quarter, we have already successfully sold and received orders from three new customers and will ship an incremental double-digit portfolio of new items into existing customers, further expanding the breadth and depth of our coverage.

“The significant revenue growth we saw this quarter reflects our transition to a national deli solutions company – a vision I outlined on our last earnings call. Our profitability, which certainly benefitted from commodity cost improvements and successful pricing actions, was concurrently driven by a keen eye on cost controls and synergy realization. As we move through the holiday season and into 2023, I anticipate the third quarter will have marked the beginning of a sustainable return to profitability for MamaMancini’s as we prepare to embark on the next leg up in our growth trajectory,” concluded Michaels.

Third Quarter Fiscal 2023 Financial Results

Revenue for the third quarter of fiscal 2023 increased 137% to a record $25.7 million, as compared to $10.9 million in the same year-ago quarter. The increase in revenue for the third quarter was driven by 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 to a record $6.6 million, or 25.5% of total revenues, in the third quarter of fiscal 2023, as compared to $2.7 million, or 24.4% of total revenues, in the same year-ago quarter. Gross profit increased in the third quarter back to targeted levels based on normalization of commodity costs, successful pricing actions and strong sales growth. The Company continues to identify procurement and logistics efficiencies and cost savings through stronger buying power created through the acquisitions of T&L and Olive Branch.

Operating expenses totaled $5.1 million in the third quarter of fiscal 2023, as compared to $2.7 million in the same year-ago quarter. As a percentage of sales, operating expenses decreased to 19.7% in the third quarter of fiscal 2023, as compared to 24.4% in the same year-ago quarter. Operating expenses, as a percentage of sales, benefited from synergies created through the acquisitions of T&L and Olive Branch.

Income from equity method investment in Chef Inspirational Foods totaled $0.1 million in the third quarter of fiscal 2023.

Net income for the third quarter of fiscal 2023 totaled $1.1 million, or $0.03 per diluted share, as compared to a net loss of $(0.0) million, or $(0.00) per diluted share, in the same year-ago quarter.

Adjusted EBITDA, a non-GAAP term, increased to $2.1 million for the third quarter of fiscal 2023, as compared to $0.3 million in the same year-ago quarter.

Cash and cash equivalents as of October 31, 2022 were $3.5 million, as compared to $0.9 million at January 31, 2022. The increase in cash and cash equivalents was driven by $3.0 million in cash flow from operations in the third quarter of fiscal 2023, $1.5 million of which was used to pay down the Company’s credit line.

Third 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 third quarter fiscal 2023 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:

Q3 FY2023 Earnings Conference Call
Date: Monday, December 12, 2022
Time: 4:30 p.m. Eastern time
U.S. Dial-in: 1-877-451-6152
International Dial-in: 1-201-389-0879
Conference ID: 13734209
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1581056&tp_key=4f39d94f1d

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

A playback of the call will be available through Monday, December 19, 2022. 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 13734209. A webcast replay will also be available using the link above.

About MamaMancini’s Holdings, Inc.

MamaMancini's Holdings, Inc. (NASDAQ: MMMB) is a leading marketer and manufacturer of prepared foods with products offered in over 45,000 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 October 31,
		2022				2021
Net Income / (Loss)		$	1,085,527			$	-5,455
Depreciation		$	277,584			$	190,506
Amortization of Debt discount		$	3,015			$	-
Amortization of Right of Use Assets		$	90,065			$	71,481
Amortization of Intangibles		$	137,130			$	-
Taxes		$	285,686			$	-2,075
Interest		$	183,844			$	8,731
Acquisition Related Expenses		$	-			$	-
Adj. EBITDA (non-GAAP)		$	2,062,851			$	263,188

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

		October 31, 2022				January 31, 2022
		(unaudited)
Assets:
Current Assets:
Cash		$	3,479,287			$	850,598
Accounts receivable, net			6,892,699				7,627,717
Inventories			3,563,959				2,890,793
Prepaid expenses			380,135				269,209
Total current assets			14,316,080				11,638,317
Property and equipment, net			3,579,437				3,678,532
Intangibles, net			1,617,693				1,984,979
Goodwill			8,633,334				8,633,334
Operating lease right of use assets, net			3,323,390				3,596,317
Deferred tax asset			350,895				448,501
Equity method investment in Chef Inspirational			1,290,464				-
Deposits			52,249				52,249
Total Assets		$	33,163,542			$	30,032,229
Liabilities and Stockholders’ Equity:
Liabilities:
Current Liabilities:
Accounts payable and accrued expenses		$	8,065,749			$	6,479,140
Term loan, net of debt discount of $48,726 and $57,771, respectively			1,502,998				1,235,333
Operating lease liability			378,223				292,699
Finance leases payable			180,085				218,039
Promissory note – related party			839,170				759,917
Series B Preferred Shares to be issued, net			185,000				-
Total current liabilities			11,151,225				8,985,128
Line of credit			990,000				765,000
Operating lease liability – net of current			2,992,603				3,339,255
Finance leases payable – net of current			295,805				376,132
Promissory note – related party, net of current			2,250,000				2,250,000
Term loan – net of current			5,043,104				6,206,896
Total long-term liabilities			11,571,512				12,937,283
Total Liabilities			22,722,737				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 October 31, 2022 and January 31, 2022, 0 shares outstanding as of October 31, 2022 and January 31, 2022			-				-
Series B Preferred stock, $0.00001 par value; 200,000 shares authorized; 47,200 and 0 issued and outstanding as of October 31, 2022 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 October 31, 2022 and January 31, 2022			364				359
Additional paid in capital			22,472,793				20,587,789
Accumulated deficit			(11,882,852	)			(12,328,830	)
Less: Treasury stock, 230,000 shares at cost, respectively			(149,500	)			(149,500	)
Total Stockholders’ Equity			10,440,805				8,109,818
Total Liabilities and Stockholders’ Equity		$	33,163,542			$	30,032,229

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

		For the Three Months Ended October 31,								For the Nine Months Ended October 31,
		2022				2021				2022				2021
Sales-net of slotting fees and discounts		$	25,693,913			$	10,852,682			$	70,370,967			$	33,230,666
Costs of sales			19,129,707				8,206,939				57,384,953				24,006,920
Gross profit			6,564,206				2,645,743				12,986,014				9,223,746
Operating expenses:
Research and development			24,432				33,866				92,759				87,843
General and administrative			5,041,213				2,610,676				11,965,016				7,697,590
Total operating expenses			5,065,645				2,644,542				12,057,775				7,785,433
Income from operations			1,498,561				1,201				928,239				1,438,313
Other income (expenses)
Interest			(183,844	)			(8,731	)			(447,159	)			(26,710
Amortization of debt discount			(3,015	)			-				(9,670	)			-
Other income			-				-				2,596				37,704
Total other income (expenses)			(186,859	)			(8,731	)			(454,233	)			10,994
Net income (loss) before income tax provision and income from equity method investment			1,311,702				(7,530	)			474,006				1,449,307
Income from equity method investment in Chef Inspirational			71,924				-				90,464				-
Income tax benefit (provision)			(285,686	)			2,075				(106,079	)			(391,313
Net income (loss)			1,097,940				(5,455	)			458,391				1,057,994
Less: Class B preferred dividends			(12,413	)			-				(12,413	)			-
Net income (loss) available to common stockholders			1,085,527			$	(5,455	)		$	445,978			$	1,057,994
Net income (loss) per common share
– basic		$	0.03			$	(0.00	)		$	0.01			$	0.03
– diluted		$	0.03			$	(0.00	)		$	0.01			$	0.03
Weighted average common shares outstanding
– basic			36,317,857				35,728,821				36,020,209				35,683,484
– diluted			36,614,635				35,728,821				36,348,534				36,176,949

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

				For the Nine Months Ended October 31,
				2022					2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income				$	458,391				$	1,057,994
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation					678,710					572,238
Amortization of debt discount					9,670					-
Amortization of right of use assets					272,927					163,141
Amortization of intangibles					367,286					-
Share-based compensation					35,959					20,467
Change in deferred tax asset					97,606					383,313
Income from equity method investment in Chef Inspirational					(90,464	)				-
Changes in operating assets and liabilities:
Accounts receivable					735,018					12,445
Inventories					(673,166	)				(419,527
Prepaid expenses					(111,551	)				(75,184
Security deposits					-					(2,979
Accounts payable and accrued expenses					1,664,762					562,095
Operating lease liability					(261,128	)				(141,206
Net Cash Provided by Operating Activities					3,184,020					2,132,797
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for fixed assets					(507,547	)				(657,607
Cash paid for investment in Chef Inspirational					(500,000	)				-
Net Cash (Used in) Investing Activities					(1,007,547	)				(657,607
										-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds in advance of preferred stock offering					185,000					-
Proceeds from preferred stock offering					1,180,000					-
Payment of stock offering costs					(57,200	)				-
Repayment of term loan					(905,172	)				-
Borrowings of line of credit, net					225,000					-
Repayment of finance lease obligations					(190,349	)				(144,910
Payment of Preferred B dividends					(11,313	)				-
Proceeds from exercise of options					26,250					19,080
Net Cash Provided by (Used in) Financing Activities					452,216					(125,830
Net Increase in Cash					2,628,689					1,349,360
Cash - Beginning of Period					850,598					3,190,560
Cash - End of Period				$	3,479,287				$	4,539,920
SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income taxes				$	9,170				$	6,830
Interest				$	369,400				$	28,748
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Finance lease asset additions				$	72,068				$	128,050
Operating lease asset additions				$	-				$	347,585
Non-cash consideration paid in common stock for equity investment in Chef Inspirational				$	700,000				$	-
Preferred B accrued dividends				$	1,100				$	-