MamaMancini's Reports Financial Results for Fiscal Third Quarter
Cash Flow From Operations Improved $1.2 Million From Prior Year
/EINPresswire.com/ -- EAST RUTHERFORD, NJ -- (Marketwired) -- 12/11/15 -- MamaMancini's Holdings, Inc. (the "Company" or "MamaMancini's") (OTCQB: 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 its financial results for the three months ended October 31, 2015.
Fiscal Third Quarter 2015 Business and Financial Highlights
- Cash used in operating activities was ($131,000) an improvement of $1.2 million from ($1,341,000) in the prior year.
- Net operating loss was ($358,000), an improvement of $390,000 over the prior year period.
- Net loss of ($996,000) or ($0.04) per basic and diluted share, compared with ($774,000) or ($0.03) per basic and diluted share. The loss in the third quarter of 2015 includes a write-off of non-operating debt restructuring expense of $380,000, other non-cash charges of $92,000 and interest expense of $145,000.
- Gross profit margin increased to 30% of sales compared to 28% in the same period last year.
- Sales were down 14% from prior year. Prior year sales included 23% of negative margin accounts which have been eliminated. The Company foresees positive year-over-year sales growth in calendar 2016.
- Subsequent to quarter end, 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.
- The Company does not foresee a need to issue additional equity in the near future.
- Positive cash EBITDA (excluding stock compensation) of $25,000 for the month of October 2015.
- The Company expects operating cash earnings (excluding non-cash expenses) to be break-even going forward.
Carl Wolf, Chief Executive Officer of MamaMancini's, commented, "Our continued focus on lowering operating expenses, pruning underperforming accounts from our portfolio and expanding our distribution footprint of high-quality retailers is resulting in positive outcomes for our business. During the third quarter, we delivered a higher gross margin and substantially decreased our operating and net losses. By adjusting our pricing, eliminating unprofitable accounts and prudently spending on sales and marketing, our new sales have improved margin profiles and are setting us on a path to achieve break-even from an operating cash flow perspective in the fall of 2015.
Mr. Wolf added, "We are committed to achieving and sustaining profitable growth by expanding our distribution footprint and increasing product placements with our retailers in order to increase our operating cash flow. Just last month we received new authorizations for distribution representing over 2,200 new product placements, in additional locations within the Safeway, Albertsons, Randalls, Associated Grocers, Whole Foods and Lowes Supermarkets retail chains at locations across the United States. We expect to place new products in each of these supermarkets by the end of January, 2016."
"Our relationship with QVC also remains strong with the expansion of our all natural products from two to seven since September 1st," concluded Mr. Wolf. "Our relationship with QVC allows us to reach into millions of households across the country in a relatively short period of time. The QVC audience responds extremely well each time Dan Mancini makes an appearance and we are encouraged by the opportunities for additional sales from this important distribution channel."
Summary Financial Results
Sales, net of slotting fees and discounts, were $3.2 million for the fiscal quarter ended October 31, 2015, a decrease of 14% from $3.8 million for the fiscal quarter ended October 31, 2014. The decrease in sales is primarily related to the Company's deliberate termination of certain unprofitable accounts, which accounted for 23% of sales in the prior year. The Company has sold into approximately 10,150 retail and grocery locations as of October 31, 2015, compared to approximately 10,500 locations at October 31, 2014.
Gross profit was $1.0 million, or 30% of sales, for the three months ended October 31, 2015 compared to $1.1 million, or 28% of sales, in the year ago period.
Net loss for the fiscal quarter ended October 31, 2015 was ($976,000), or ($0.04) per basic and diluted share, compared to a net loss of $(774,000), or ($0.03) per basic and diluted share, in the prior year.
Cash Used in Operating Activities for the three months ended October 31, 2015 was ($131,000) compared to ($1.3) million in the prior year period, an improvement of $1.2 million.
Subsequent to the end of the third quarter, on November 20, 2015 the Company completed a convertible preferred equity financing (the "Offering") which began on June 8, 2015, resulting in $1.8 million in net proceeds. The Company's management was responsible for investing $1.0 million in the Offering. With the proceeds from the Offering, and the refinancing of the Company's note with Manatuck Hill Partners, LLC, the Company does not foresee raising additional equity capital in the near future.
Conference Call
The Company will hold its quarterly earnings call on December 14, 2015 at 10:00am ET. Interested parties may participate in the call by dialing 1-877-407-9124 (domestic) or 1-201-689-8584 (international) 5-10 minutes prior to the start time. The conference call will be available for replay until January 14, 2016 at 11:59PM ET. For the replay, please dial 1-877-660-6853 (domestic) or 1-201-612-7415 (international) and use access code 13626775.
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, 2015 and other filings made by the Company with the Securities and Exchange Commission.
MamaMancini's Holdings, Inc.
Condensed Consolidated Balance Sheets
October 31, January 31,
2015 2015
-------------- --------------
(unaudited)
Assets
Assets:
Cash $ 386,974 $ 854,995
Accounts receivable, net 1,379,444 2,233,211
Inventories 324,871 301,170
Prepaid expenses 144,939 107,242
Deposit on property and equipment - -
Due from related party - -
Due from manufacturer - related party 2,099,785 2,213,037
Deposit with manufacturer - related party - -
Deferred offering costs 10,021 -
-------------- --------------
Total current assets 4,346,034 5,709,655
Property and equipment, net 1,118,885 1,124,745
Debt issuance costs, net 40,286 101,197
-------------- --------------
Total Assets $ 5,505,205 $ 6,935,597
============== ==============
Liabilities and Stockholders' Equity (Deficit)
Liabilities:
Accounts payable and accrued expenses $ 924,869 $ 1,216,436
Line of credit 1,077,299 1,409,098
Term loan 120,000 120,000
Promissory note 139,559 -
-------------- --------------
Total current liabilities 2,261,727 2,745,534
-------------- --------------
Term loan - net of current 350,000 440,000
Promissory note - net of current portion 219,273 -
Notes payable - related party 125,000 -
Convertible note payable - net of current
portion and debt discount 2,540,000 1,587,447
-------------- --------------
Total long-term liabilities 3,234,273 2,027,447
-------------- --------------
Total Liabilities 5,496,000 4,772,981
-------------- --------------
Commitments and contingencies
Stockholders' Equity (Deficit)
Series A Preferred stock, $0.00001 par
value; 120,000 shares authorized; 12,100
and 0 shares issued and outstanding,
respectively - -
Preferred stock, $0.00001 par value;
20,000,000 shares authorized; no shares
issued and outstanding - -
Common stock, $0.00001 par value;
250,000,000 shares authorized; 26,151,533
and 26,047,376 shares issued and
outstanding, respectively 263 260
Additional paid in capital 13,863,545 12,766,116
Common stock subscribed, $0.00001 par value;
66,667 and 66,667 shares, respectively 1 1
Accumulated deficit (13,705,104) (10,603,761)
Less: Treasury stock, 230,000 and 0 shares,
respectively (149,500) -
-------------- --------------
Total Stockholders' Equity (Deficit) 9,205 2,162,616
-------------- --------------
Total Liabilities and Stockholders' Equity
(Deficit) $ 5,505,205 $ 6,935,597
============== ==============
See accompanying notes to the condensed consolidated financial statements
F-2
MamaMancini's Holdings, Inc.
Condensed Consolidated Statements of Operations
For the Three Months For the Nine Months
Ended Ended
October 31, October 31, October 31, October 31,
2015 2014 2015 2014
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Sales - net of slotting
fees and discounts $ 3,237,780 $ 3,759,698 $ 9,330,259 $ 8,592,615
Cost of sales 2,255,649 2,705,436 6,754,980 6,076,565
----------- ----------- ----------- -----------
Gross profit 982,131 1,054,262 2,575,279 2,516,050
----------- ----------- ----------- -----------
Operating expenses
Research and
development 33,877 28,967 77,435 71,959
General and
administrative
expenses 1,306,413 1,773,678 4,480,159 4,643,417
----------- ----------- ----------- -----------
Total operating
expenses 1,340,290 1,802,645 4,557,594 4,715,376
----------- ----------- ----------- -----------
Loss from operations (358,159) (748,383) (1,982,315) (2,199,326)
----------- ----------- ----------- -----------
Other expenses
Interest expense (145,252) (25,426) (393,314) (68,770)
Amortization of debt
discount (79,400) - (261,670) -
Amortization of
closing costs (12,622) - (52,996) -
Loss on debt
extinguishment (380,089) - (380,089) -
----------- ----------- ----------- -----------
Total other expenses (617,363) (25,426) (1,088,069) (68,770)
----------- ----------- ----------- -----------
Net loss (975,522) (773,809) (3,070,384) (2,268,096)
Less: preferred
dividends (20,000) - (30,959) -
----------- ----------- ----------- -----------
Net loss available to
common stockholders $ (995,522) $ (773,809) $(3,101,343) $(2,268,096)
=========== =========== =========== ===========
Net loss per common
share - basic and
diluted $ (0.04) $ (0.03) $ (0.12) $ (0.09)
=========== =========== =========== ===========
Weighted average common
shares outstanding
-basic and diluted 26,147,207 25,815,200 26,096,965 25,331,766
=========== =========== =========== ===========
See accompanying notes to the condensed consolidated financial statements
F-3
MamaMancini's Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended
October 31, October 31,
2015 2014
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,070,384) $ (2,268,096)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 209,884 101,541
Amortization of debt issuance costs 52,996 107,088
Amortization of debt discount 261,670 -
Share-based compensation 114,504 264,347
Loss on extinguishment of debt 380,089 -
Changes in operating assets and liabilities:
(Increase) Decrease in:
Accounts receivable 853,767 (1,282,651)
Inventories (23,701) (53,626)
Prepaid expenses (37,697) (67,632)
Due from manufacturer - related party 113,252 (635,152)
Increase (Decrease) in:
Accounts payable and accrued expenses 256,306 103,205
-------------- --------------
Net Cash Used In Operating Activities (889,314) (3,730,976)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for fixed assets (204,024) (264,670)
-------------- --------------
Net Cash Used In Investing Activities (204,024) (264,670)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of preferred stock 560,000 -
Proceeds from issuance of common stock - 1,180,003
Proceeds from common stock subscribed - 100,000
Stock issuance costs (266,672) (149,213)
Deferred offering costs (10,021)
Proceeds from demand notes 650,000 -
Proceeds from notes payable - related party 125,000 -
Debt issuance costs (11,191) (29,984)
Borrowings (repayment) of line of credit,
net (331,799) 979,275
Borrowings from term loan - 600,000
Repayment of term loan (90,000) (10,000)
-------------- --------------
Net Cash Provided By Financing
Activities 625,317 2,670,081
-------------- --------------
Net Decrease in Cash (468,021) (1,325,565)
Cash - Beginning of Period 854,995 1,541,640
-------------- --------------
Cash - End of Period $ 386,974 $ 216,075
============== ==============
SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income taxes $ - $ -
============== ==============
Interest $ 363,647 $ 43,344
============== ==============
SUPPLEMENTARY DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Stock issuance costs paid in the form of
warrants $ 84,547 $ 171,981
============== ==============
Conversion of demand notes to preferred
stock $ 650,000 $ -
============== ==============
Stock issued for debt discount on
convertible note $ 39,600 $ -
============== ==============
Accrued dividends $ 30,959 $ -
============== ==============
Repurchase of common stock amendment of
convertible note $ 149,500 $ -
============== ==============
Accrued interest reclassified to principal
balance of convertible note $ 220,000 $ -
============== ==============
Promissory note issued for accounts payable $ 358,832 $ -
============== ==============
Deferred offering costs in accounts payable $ - $ 5,400
============== ==============
Debt issuance costs in accounts payable $ - $ 13,337
============== ==============
See accompanying notes to the condensed consolidated financial statements
F-5
James Carbonara
Hayden IR
(646)-755-7412
james@haydenir.com
Brett Maas
Hayden IR
(646) 536-7331
brett@haydenir.com
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