MAMA'S CREATIONS, INC.
EAST RUTHERFORD, NJ--(Marketwired - Apr 21, 2016) - MamaMancini's Holdings, Inc. (the "Company" or "MamaMancini's") (
Fiscal Fourth Quarter and Full Year 2016 Highlights:
- Full year 2016 revenue increased 5% to $12.6 million compared to full year 2015 reflecting the strategic exit from a substantial number of lower margin accounts in 2016.
- Fourth quarter 2016 revenue of $3.4 million was generated off a 25% lower account base as the Company strategically exited from a substantial number of lower margin accounts in 2016. Fourth quarter 2015 revenue was $3.6 million.
- Fourth quarter 2016 gross margin increased substantially to 34.4% compared to 23.5% in the fourth quarter of fiscal 2015.
- Total operating expenses for the fourth quarter decreased 36% versus the comparable quarter of fiscal 2015 as the Company continued to enhance operating efficiencies.
- Operating Loss in the fourth quarter improved by 81% to $(277,001) from $(1,450,864) in fourth quarter of fiscal 2015.
- Net loss for the fourth quarter of fiscal 2016 improved 74% to $(441,243) from $(1.7 million) in the fourth quarter of fiscal 2015.
- Gross margin for fiscal year 2016 increased 180 basis points to 28.5% versus 26.7% in fiscal 2015.
- Loss from Operations for the year improved 40% to $(2,259,317) versus $(3,750,190) in prior year.
- Net loss for fiscal 2016 improved 14% to $(3.51 million) compared to $(4.06 million) in fiscal 2015. EPS for fiscal 2016 was $(0.14) compared to $(0.16) in fiscal 2015.
- The Company added QVC as a major new customer in fiscal 2016.
- Several new chain customers were contracted in fiscal 2016 with initial shipments commencing in first quarter of fiscal 2017.
- On November 20, 2015, the Company completed a convertible preferred equity financing which resulted in gross proceeds of $2.23 million and $1.83 million in net proceeds. The financing which began in June 2015, included investment by the Company's management of $1.0 million.
- During the fourth quarter of fiscal 2016 the Company appointed an active broker network in the western U.S. to expand the Company's national sales coverage to approximately 90% of the 48 contiguous U.S. states.
Carl Wolf, Chief Executive Officer of MamaMancini's, commented, "We had a solid fourth quarter with substantially higher gross margins, lower operating expenses, and dramatic improvement in our operating and bottom-line results. Revenue for the quarter was marginally lower, 4%, than the comparable quarter last year. However, we strategically exited approximately 25% of our account base during the year that did not generate appropriate margins. Consequently, our now sustainable account base generated a significantly increased gross margin of 34.4% for the fourth quarter of fiscal 2016 versus 23.5% for last year's fourth quarter. In addition, total operating expenses for the quarter decreased by 36% as we continued to enhance operating efficiencies. The net result was significant improvement in our operating and net loss for the quarter. We are pleased with these operating improvements and we believe they will continue into the new fiscal year and will set the stage improved financial performance in fiscal 2017 and in the coming years."
"Strategically, we are dedicated to growing our presence in the perimeter of the retail grocery stores in which our products are sold," continued Mr. Wolf. "The perimeter of the store is where fresh, minimally or non-processed, healthy foods are offered. On an industry-wide basis, this outer band of the retail grocery store is growing at an estimated 10% annual rate compared to the middle of the store which is experiencing a one to two percent annual decline. Along with our distributors we are working hard to gain more shelf space and placement in this fast growing section.
"In that regard, we have activated the western U.S. sales territory with the appointment of an active broker network this past December. We now effectively have sales coverage of approximately 90% of the contiguous 48 U.S. states and are now better positioned for revenue growth in the coming years. In addition to expanding our national sales coverage, we are also pursuing growth in the club store segment where our products can gain heightened consumer acceptance while supporting product purchases at the retail level."
Mr. Wolf concluded, "All in all, fiscal 2016 was a solid year for MamaMancini's. The Company added substantial new retail chains, exited from non-profitable accounts, increased gross margins, expanded business with existing high quality accounts and we maintain an active relationship with QVC. We expect to see meaningfully improved operating and financial performance in fiscal 2016 and in the years to come."
Fiscal 2016 Results
Sales, net of slotting fees and discounts, increased 5% for full year 2016 to $12.6 million compared to $12.0 million in fiscal 2015. Sales for the year were impacted by the Company's deliberate termination of certain unprofitable accounts, which accounted for 25% of the company's accounts in the prior year.
Gross profit for the fiscal year was $3.6 million, or 29% of sales, for the fiscal year ended January 31, 2016 compared to $3.2 million, or 27% of sales, primarily driven by improved operating efficiencies, price increases, lower commodity costs, and exiting low margin business.
As of January 31, 2016, the Company's products were sold in approximately 10,100 stores, with an average of 3.16 product SKUs in each store, aggregating to approximately 32,000 retail and grocery shelf placements throughout the U.S. That compares with approximately 37,000 shelf placements as of January 31, 2015.
Net loss for the fiscal year ended January 31, 2016 was $(3.51 million), or $(0.14) per basic and diluted share, compared to a net loss of $(4.06 million), or $(0.16) per basic and diluted share, in fiscal year 2015.
Fourth Quarter 2016 Results
Sales, net of slotting fees and discounts, were $3.4 million for the fourth fiscal quarter ended January 31, 2016, a decrease of 3.8% from $3.6 million for the comparable quarter in fiscal 2015. The decrease in sales is primarily related to the Company's deliberate termination of certain unprofitable accounts, which accounted for approximately 25% of the Company's accounts in the prior year.
Gross profit was $1.18 million, or 34.4% of sales, for the three months ended January 31, 2016 compared to $838,184, or 23.6% of sales, in the year ago period.
Net loss for the fourth fiscal quarter ended January 31, 2016 was ($441,234), or ($0.02) per basic and diluted share, compared to a net loss of $(1.7 million), or ($0.07) per basic and diluted share, in the fourth quarter of fiscal 2015.
Conference Call
The Company has scheduled a conference call for Friday, April 22, 2016, at 10:00 am ET to review the results of the fourth quarter and fiscal year ended January 31, 2016.
Interested parties may participate on the conference call by dialing 1-605-562-3140; passcode 333016#. Please dial-in five minutes prior to the start time.
About MamaMancini's
MamaMancini's is a marketer and distributor of a line of beef meatballs with sauce, turkey meatballs with sauce, chicken meatballs with sauce, pork meatballs with sauce, and other similar Italian products. The Company's sales have been growing on a consistent basis as the Company expands its distribution channel, which includes major retailers such as Costco, Publix, Shop Rite, Price Chopper, Harris Teeter, SaveMarts, Luckys, Lunds/Byerly's, SuperValu, Raley's, BJ's, Whole Foods, Shaw's Supermarkets, Kings, Key Foods, Stop-n-Shop, Giant Stores, Giant Eagle, King Kullen, Food Town, Kroger, Safeway, Albertsons, Lowes, Nash Finch, Spartan Stores, Shoppers, Marsh's Supermarkets, Central Markets, Weis Markets, Ingles, and The Fresh Market.
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, 2016 and other filings made by the Company with the Securities and Exchange Commission
| MamaMancini's Holdings, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| January 31, | January 31, | |||||||
| 2016 | 2015 | |||||||
| Assets | ||||||||
| Assets: | ||||||||
| Cash | $ | 587,422 | $ | 854,995 | ||||
| Accounts receivable, net | 1,476,582 | 2,233,211 | ||||||
| Inventories | 252,752 | 301,170 | ||||||
| Prepaid expenses | 154,458 | 107,242 | ||||||
| Due from manufacturer - related party | 2,248,781 | 2,213,037 | ||||||
| Total current assets | 4,719,995 | 5,709,655 | ||||||
| Property and equipment, net | 1,047,455 | 1,124,745 | ||||||
| Debt issuance costs, net | 26,620 | 101,197 | ||||||
| Total Assets | $ | 5,794,070 | $ | 6,935,597 | ||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||||
| Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 769,551 | $ | 1,216,436 | ||||
| Line of credit | 959,621 | 1,409,098 | ||||||
| Term loan | 120,000 | 120,000 | ||||||
| Promissory notes | 266,808 | - | ||||||
| Notes payable - related party | 125,000 | - | ||||||
| Convertible note payable - net of debt discount | 2,540,000 | - | ||||||
| Total current liabilities | 4,780,980 | 2,745,534 | ||||||
| Term loan - net of current | 320,000 | 440,000 | ||||||
| Promissory notes - net of current portion | 69,767 | - | ||||||
| Convertible note payable - net of current portion and debt discount | - | 1,587,447 | ||||||
| Total long-term liabilities | 389,767 | 2,027,447 | ||||||
| Total Liabilities | 5,170,747 | 4,772,981 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' Equity (Deficit) | ||||||||
| Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 and 0 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; 26,507,516 and 26,047,376 shares issued and outstanding, respectively | 265 | 260 | ||||||
| Additional paid in capital | 14,954,928 | 12,766,116 | ||||||
| Common stock subscribed, $0.00001 par value; 66,667 and 66,667 shares, respectively | 1 | 1 | ||||||
| Accumulated deficit | (14,182,371 | ) | (10,603,761 | ) | ||||
| Less: Treasury stock, 230,000 and 0 shares, respectively | (149,500 | ) | - | |||||
| Total Stockholders' Equity (Deficit) | 623,323 | 2,162,616 | ||||||
| Total Liabilities and Stockholders' Equity (Deficit) | $ | 5,794,070 | $ | 6,935,597 | ||||
| MamaMancini's Holdings, Inc. | ||||||||||
| Consolidated Statements of Operations | ||||||||||
| For the Year Ended | ||||||||||
| January 31, 2016 | January 31, 2015 | |||||||||
| Sales - net of slotting fees and discounts | $ | 12,603,447 | $ | 12,010,268 | ||||||
| Cost of sales | 9,006,220 | 8,803,540 | ||||||||
| Gross profit | 3,597,227 | 3,206,728 | ||||||||
| Operating expenses | ||||||||||
| Research and development | 107,632 | 100,864 | ||||||||
| General and administrative expenses | 5,748,912 | 6,856,054 | ||||||||
| Total operating expenses | 5,856,544 | 6,956,918 | ||||||||
| Loss from operations | (2,259,317 | ) | (3,750,190 | ) | ||||||
| Other expenses | ||||||||||
| Interest expense | (555,071 | ) | (163,136 | ) | ||||||
| Amortization of debt discount | (261,670 | ) | (46,197 | ) | ||||||
| Amortization of closing costs | (55,471 | ) | (100,953 | ) | ||||||
| Loss on debt extinguishment | (380,089 | ) | - | |||||||
| Total other expenses | (1,252,301 | ) | (310,286 | ) | ||||||
| Net loss | (3,511,618 | ) | (4,060,476 | ) | ||||||
| Less: preferred dividends | (66,992 | ) | - | |||||||
| Net loss available to common stockholders | $ | (3,578,610 | ) | $ | (4,060,476 | ) | ||||
| Net loss per common share - basic and diluted | $ | (0.14 | ) | $ | (0.16 | ) | ||||
| Weighted average common shares outstanding | ||||||||||
| -basic and diluted | 26,147,913 | 25,487,778 | ||||||||
| MamaMancini's Holdings, Inc. | ||||||||||
| Consolidated Statements of Cash Flows | ||||||||||
| For the Year Ended | ||||||||||
| January 31, 2016 | January 31, 2015 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
| Net loss | $ | (3,511,618 | ) | $ | (4,060,476 | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
| Depreciation | 285,516 | 170,113 | ||||||||
| Amortization of debt issuance costs | 55,471 | 100,953 | ||||||||
| Amortization of debt discount | 261,670 | 46,197 | ||||||||
| Amortization of deferred offering costs | 10,021 | - | ||||||||
| Share-based compensation | 245,547 | 266,362 | ||||||||
| Loss on extinguishment of debt | 380,089 | - | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| (Increase) Decrease in: | ||||||||||
| Accounts receivable | 756,629 | (1,203,579 | ) | |||||||
| Inventories | 48,418 | (141,341 | ) | |||||||
| Prepaid expenses | (47,216 | ) | 33,269 | |||||||
| Due from manufacturer - related party | (35,744 | ) | (840,001 | ) | ||||||
| Increase (Decrease) in: | ||||||||||
| Accounts payable and accrued expenses | 290,958 | 621,139 | ||||||||
| Net Cash Used In Operating Activities | (1,260,259 | ) | (5,007,364 | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
| Cash paid for fixed assets | (208,226 | ) | (316,831 | ) | ||||||
| Net Cash Used In Investing Activities | (208,226 | ) | (316,831 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
| Proceeds from issuance of preferred stock | 1,580,000 | - | ||||||||
| Proceeds from issuance of common stock | - | 1,180,003 | ||||||||
| Proceeds from common stock subscribed | - | 100,000 | ||||||||
| Stock issuance costs | (436,330 | ) | (174,211 | ) | ||||||
| Deferred offering costs | (10,021 | ) | ||||||||
| Proceeds from demand notes | 650,000 | - | ||||||||
| Proceeds from notes payable - related party | 125,000 | - | ||||||||
| Debt issuance costs | - | (214,636 | ) | |||||||
| Borrowings (repayment) of line of credit, net | (449,477 | ) | 1,186,394 | |||||||
| Borrowings from term loan | - | 600,000 | ||||||||
| Repayment of term loan | (120,000 | ) | (40,000 | ) | ||||||
| Repayment of promissory notes | (138,260 | ) | - | |||||||
| Borrowings from convertible note | - | 2,000,000 | ||||||||
| Net Cash Provided By Financing Activities | 1,200,912 | 4,637,550 | ||||||||
| Net Decrease in Cash | (267,573 | ) | (686,645 | ) | ||||||
| Cash - Beginning of Period | 854,995 | 1,541,640 | ||||||||
| Cash - End of Period | $ | 587,422 | $ | 854,995 | ||||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||||
| Cash Paid During the Period for: | ||||||||||
| Income taxes | $ | - | $ | - | ||||||
| Interest | $ | 488,682 | $ | 132,803 | ||||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||
| Stock issuance costs paid in the form of warrants | $ | 241,769 | $ | 171,981 | ||||||
| Conversion of demand notes to preferred stock | $ | 650,000 | $ | - | ||||||
| Stock issued for debt discount on convertible note | $ | 39,600 | $ | 400,000 | ||||||
| Accrued dividends | $ | 66,992 | $ | - | ||||||
| Purchase of common stock issued for amendment of convertible note | $ | 149,500 | $ | - | ||||||
| Accrued interest reclassified to principal balance of convertible note | $ | 220,000 | $ | - | ||||||
| Promissory note issued for accounts payable | $ | 474,835 | $ | - | ||||||
| Preferred A and warrants issued for accounts payable | $ | 110,000 | $ | - | ||||||
