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MamaMancini's Holdings Reports 2019 Financial Results

Reports Record Sales, Net Income from Operations, EBITDA and Net Income;
Significantly Improves Working Capital and Balance Sheet with New Financing in January

EAST RUTHERFORD, NJ, April 23, 2019 (GLOBE NEWSWIRE) -- MamaMancini's Holdings, Inc. (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 fourth quarter and fiscal year 2019, ended January 31, 2019.

Fiscal Year Highlights:

  • Fiscal year 2019 revenue increased 4% to $28.5 million compared to $27.5 million in fiscal 2018.
  • Fiscal year 2019 gross margin was 35%, attributed to manufacturing efficiencies and cost control, versus 34% in the prior fiscal year. 
  • Total operating expenses for the fiscal year 2019 increased 2% as the Company maintained strong expense control during the year versus a 21% increase in fiscal 2018 operating expenses.
  • Income from operations for fiscal 2019 improved to $1.6 million from $1.1 million in fiscal 2018; an increase of approximately 45%.
  • EBITDA for fiscal 2019 was $2.2 million compared to $1.6 million in fiscal 2018.
  • Net Income available to common shareholders for fiscal year 2019 was $550,048, or $0.02 per share, compared to $228,175 or $0.01 per share, in fiscal 2018.
  • Fiscal and quarterly results for 2019 include non-cash expenses of $175,972 for the fiscal year and $42,219 for the fourth quarter relating to stock options to employees and directors.

Fourth Quarter Highlights:

  • During the fourth quarter the Company arranged a new $3.5 million working capital line of credit with M&T Bank at LIBOR plus four points with a two-year expiration, and a $2.5 million five-year note at LIBOR plus four points with repayments in equal payments over 60 months with no prepayment penalty. The Company estimates it initially will be paying a 6.5% per annum interest rate on the new financing, versus an average of over 12.5% per annum on the prior financing it replaced.
  • The new financing significantly improved the Company’s working capital and balance sheet resulting in an increase $4,147,296 in working capital from prior year.
  • Fourth quarter of fiscal year 2019 revenue was $6,896,441 compared to $7,829,245 in prior year period.  The Company believes the lower sales for the quarter were not consistent with long term trends.  The lower sales were mainly the result of inventory changes in its largest customers whose sales of MamaMancini’s products to its consumers were positive with prior year numbers.  Also, the Company did not receive an in-and-out rotation for the holidays this year with a major retailer. However, management believes this customer will reestablish the in-and-out rotation this year.
  • Gross Margin was 35% of sales versus 33 % in the prior year period.
  • Operating expenses decreased by $285,333 in the fourth quarter fiscal 2019 compared to fourth quarter fiscal 2018. 
  • Net Operating Income was $345,616 compared to $250,589 in the prior year period.
  • Net income was $79,894 compared to $34,663 in the prior year period. Net Income in 2019 was negatively affected by a charge of $148,438 related to the termination of prior financing and the transition to M&T Bank.

Carl Wolf, Chief Executive Officer of MamaMancini's, commented, “During fiscal year 2019 we made significant improvements to our manufacturing capabilities, planned the introduction of a number of new products, and made the strategic decision to enter into the food service segment of the business. This is important in that the food service business is effectively as large as the retail grocery segment in which we currently compete. We believe we have the manufacturing capacity and the necessary menu to provide nutritious and rapidly prepared products to food service distributors; chain restaurants; convenience stores; health and eldercare institutions; college and universities, corporate commissaries and kitchens; casinos; and export distributors.  

“We were also pleased to have arranged our new working capital line and five-year note with M&T Bank. We will benefit from substantially lower interest rates for the terms of these capital sources. We are pleased to be working with a financial institution the caliber of M&T Bank. We appreciate the confidence that M&T has invested in us and we look forward to growing our business, and our relationship with M&T Bank, in the years to come.”

Mr. Wolf concluded, “Subsequent to the end of the fiscal year we commenced shipments of nine new SKUs to new retail grocery customers including BJ Club Stores, Walmart and Ahold. These are large new customers that offer the potential for deeper integration into their large network of stores. We initiated a comprehensive advertising strategy with Sirius XM where we ran up to 1,000 commercials in the first fiscal quarter through the Easter and Passover holidays. We also hired Allan Sabatier as our Vice President of Business Development to begin, in earnest, our entry into the food service segment. Allan has extensive experience in this market, and we are excited with the possibilities ahead. While the financial results of fiscal 2019 represented a substantial increase in operating and net income from the prior fiscal year, we believe we have set the stage in fiscal 2019 for improving financial and operational results in fiscal 2020 and beyond.”

Non-GAAP Measures:

EBITDA, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measures included in this press release, however, should be considered in addition to, and not as a substitute for or superior to, the comparable measure prepared in accordance with GAAP. We believe that considering the non-GAAP net income before income taxes and before certain non-cash expenses assists management and investors by looking at our performance across reporting periods on a consistent basis excluding these certain charges that are not uses of cash from our reported net loss before income taxes.

About MamaMancini’s

MamaMancini's is a marketer and distributor of a line of beef meatballs, turkey meatballs, and chicken meatballs all with sauce, five cheese stuffed beef, turkey and chicken meatballs all with sauce, and original beef and turkey meat loaves products. The Company also sells Chicken Parmesan, Stuffed Pepper Mix, Sausage n Peppers, Sunday Dinner and Chicken Alfredo.  The Company recently added      five pasta bowls to its offerings. The Company's sales have been growing on a consistent basis as the Company expands its distribution channels, which includes major retailers such as Publix, Shop Rite, Jewel, Walmart, Lunds and Byerlys, SUPERVALU, Safeway, Albertsons, Whole Foods Market, Shaw's, Kings, BJ’s Club Stores, Roche Bros., Key Foods, Stop & Shop, Giant, Giant Eagle, Foodtown, Sam's Club,  Costco, Pavillion Stores, HEB, Rouses, Hannaford,  Kroger, Shoppers, King Kullen, Central Markets, Weis Markets, Ingles, and The Fresh Market. The Company sells to distributors such as Sysco, AWI, UNFI, SUPERVALU, Kehe, Burris Logistics and C&S Wholesale Grocers. In addition, the Company sells a wide variety of its products through QVC, the world's largest direct to consumer marketer, via on air presentations, auto ship programs, and direct purchases through the internet.

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.

Contact:

Carl Wolf
Chairman and CEO 
MamaMancini’s Holdings, Inc.
Stock Symbol: MMMB
973-985-0280

Financial Tables to Follow

MamaMancini’s Holdings, Inc.
Consolidated Balance Sheets

    January 31, 2019     January 31, 2018  
Assets                
                 
Current Assets:                
Cash   $ 609,409     $ 581,322  
Accounts receivable, net     2,698,562       3,084,715  
Inventories     1,396,400       824,276  
Prepaid expenses     155,178       261,980  
Total current assets     4,859,549       4,752,293  
                 
Property and equipment, net     2,884,594       2,499,875  
                 
Deposits     20,177       20,177  
Total Assets   $ 7,764,320     $ 7,272,345  
                 
Liabilities and Stockholders’ Deficit                
                 
Liabilities:                
Current Liabilities:                
Accounts payable and accrued expenses   $ 3,061,932     $ 3,456,918  
Line of credit, net     -       2,688,764  
Term loans     500,000       106,938  
Capital leases payable     53,730       -  
Notes payable – net     -       1,403,082  
Total current liabilities     3,615,662       7,655,702  
                 
Term loans – net     1,914,401       651,677  
Line of credit – net     2,612,034       -  
Capital leases payable – net     162,527       -  
Note payable – net     -       250,000  
Notes payable - related party     641,844       649,656  
Total long-term liabilities     5,330,806       1,551,333  
                 
Total Liabilities     8,946,468       9,207,035  
                 
Commitments and contingencies                
                 
Stockholders’ Deficit:                
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of January 31, 2019 and 2018, 0 and 23,400 shares outstanding as of January 31, 2019 and 2018     -       -  
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; 31,866,241 and 31,753,437 shares issued and outstanding as of January 31, 2019 and 2018, respectively     320       319  
Additional paid in capital     16,547,287       16,344,794  
Accumulated deficit     (17,580,255 )     (18,130,303 )
Less: Treasury stock, 230,000 shares, respectively     (149,500 )     (149,500 )
Total Stockholders’ Deficit     (1,182,148 )     (1,934,690 )
Total Liabilities and Stockholders’ Deficit   $ 7,764,320     $ 7,272,345  

MamaMancini’s Holdings, Inc.
Consolidated Statements of Operations

    For the Years Ended  
    January 31, 2019     January 31, 2018  
             
Sales - net of slotting fees and discounts   $ 28,522,112     $ 27,543,335  
                 
Cost of sales     18,531,678       18,282,660  
                 
Gross profit     9,990,434       9,260,675  
                 
Operating expenses                
Research and development     130,920       138,000  
General and administrative     8,294,450       8,059,533  
Total operating expenses     8,425,370       8,197,533  
                 
Income from operations     1,565,064       1,063,142  
                 
Other expenses                
Interest     (881,702 )     (679,974 )
Amortization of debt discount     (133,314 )     (63,428 )
Total other expenses     (1,015,016 )     (743,402 )
                 
Net income     550,048       319,740  
                 
Less: preferred dividends     -       (91,565 )
                 
Net income (loss) available to common stockholders   $ 550,048     $ 228,175  
                 
Net income (loss) per common share - basic and diluted   $ 0.02     $ 0.01  
                 
Weighted average common shares outstanding                
- basic     31,843,755       29,811,521  
- diluted     32,521,821       32,205,577  

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

    For the Years Ended  
    January 31,2019     January 31,2018  
             
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net income   $ 550,048     $ 319,740  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation     679,005       538,322  
Amortization of debt discount     133,314       63,428  
Share-based compensation     162,494       428,240  
Changes in operating assets and liabilities:                
Accounts receivable     386,153       (1,266,895 )
Inventories     (572,124 )     (17,653 )
Prepaid expenses     106,802       (81,720 )
Accounts payable and accrued expenses     (2,284 )     1,332,038  
Net Cash Provided by Operating Activities     1,443,408       1,315,500  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Cash paid for fixed assets     (1,033,724 )     (1,474,816 )
Net Cash Used in Investing Activities     (1,033,724 )     (1,474,816 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Repayment of note payable - related party     (7,812 )     -  
Repayment of term loan     (1,058,615 )     (146,388 )
Borrowings from term loan     2,800,000       251,671  
Repayment of note payable     (2,130625 )     (1,350,000 )
Borrowings (repayments) of line of credit, net     (90,356 )     1,339,245  
Proceeds from capital lease     213,250       -  
Repayment of capital lease obligations     (26,993 )     -  
Debt issuance costs     (120,446 )     (24,697 )
Proceeds from exercise of options     40,000       -  
Net Cash Provided by (Used in) Financing Activities     (381,597 )     69,831  
                 
Net Increase (Decrease) in Cash     28,087       (89,485 )
                 
Cash - Beginning of Period     581,322       670,807  
                 
Cash - End of Period   $ 609,409     $ 581,322  
                 
SUPPLEMENTARY CASH FLOW INFORMATION:                
Cash Paid During the Period for:                
Income taxes   $ -     $ -  
Interest   $ 638,029     $ 464,958  
                 
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                
Accrued interest on note payable reclassified to principal   $ 392,702     $ -  
Capital lease asset additions   $ 30,000     $ -  
Stock issued for Series A Preferred dividends   $ -     $ 91,565  
Debt issuance costs included in principal balance of note   $ -     $ 52,236