US: MamaMancini's grows distribution, increases R&D spend
Increased distribution enabled MamaMancini's to book higher first-quarter sales but a step up in the group's R&D investment weighed on the bottom line.
The fledgling natural food group said sales in the three months to the end of April increased to US$2.6m, a 46% jump compared to $1.8m in the prior-year period.
MamaMancini's products were carried on approximately 26,000 shelves in supermarkets and club stores throughout North America as of 30 April, compared to 16,000 shelves last year. The company launched seven products available for national distribution during the quarter, MamaMancini's added.
Increased scale enabled MamaMancini's to improve its gross margin, which was up 300 basis points to 31%. Gross profit increased to $802,924, up from $490,062.
However, a higher R&D spend weighed on profitability. The group racked up an operating loss of $684,255 compared to $609,138 last year. Higher interest expenses also hit net profitability, with losses deepening to $700,889 compared to $611,388 last year.
The company said it hopes to generate "breakeven" results as it approaches the end of the fiscal year, which runs to 31 January 2015.
MamaMancini's Reports First Quarter Financial Results For Fiscal Year End January 31, 2015
EAST RUTHERFORD, N.J., June 13, 2014 /PRNewswire/ -- MamaMancini's Holdings, Inc. (the "Company") (OTCQB: MMMB), an emerging manufacturer and marketer of specialty pre-prepared, frozen and refrigerated "all natural" food products (as defined by the United States Department of Agriculture), today announced first quarter financial results of fiscal year 2015 for the period ended April 30, 2014.
First Quarter 2015 Business Highlights:
- The most recently completed quarter represents the Company's first quarter under its new fiscal year-end of January 31.
- Revenue for the first quarter of fiscal 2015 was $2.58 million, compared to $1.77 million in the prior year period, an increase of 46%;
- Gross margin for the quarter increased 300 basis points to 31% versus the comparable quarter last year;
- MamaMancini's products were carried on approximately 26,000 shelves in supermarkets and club stores throughoutNorth America as of April 30, 2014, compared to 16,000 shelves as of March 31, 2013;
- The Company launched 7 products available for national distribution during the quarter;
- The Company continued to aggressively market and advertise its products across a number of platforms, including satellite radio and social media;
- During the first quarter, the Company successfully raised $0.8 million to continue the growth of the Company, of which$0.6 million was funded by the Company's directors;
First Quarter Fiscal 2015 Results
Sales, net of slotting fees and discounts increased by approximately 46% to $2.58 million during the three months ended April 30, 2014, from $1.77 million during the corresponding period ended March 31, 2013. The increase in sales is primarily related to the Company executing on its expansion strategy, including adding more distribution outlets to sell its products.
Gross profit margin increased by approximately 3% to 31% for the three months ended April 30, 2014, up from 28% for the three months ended March 31, 2013. This increase is primarily attributable to an improved product mix as well as decreased slotting fees and discounts.
Operating expenses for the quarter ended April 30, 2014 was $1.49 million compared to $1.10 million for the quarter endedMarch 31, 2013, as the Company continued to increase spending on advertising and marketing in order to create brand awareness.
Net loss for the three months ended April 30, 2014 was $0.70 million or $(0.03) per basic and diluted share, compared to a net loss of $0.61 million, or $(0.03) per basic and diluted share, for the three months period ended March 31, 2013.
As of April 30, 2014, the Company had working capital of $3.52 million, with cash and cash equivalents of $1.08 million and zero long-term debt.
Carl Wolf, chairman and chief executive officer of MamaMancini's, said, "First quarter results met our expectations and we are pleased with the outcome. We continue to aggressively proceed in the first half of fiscal 2015 with our growth strategy of adding more distributors that carry our products along with the introduction of new, all-natural, authentic Italian offerings. We have added several new products in the past quarter and plan to add more in the coming months. The feedback on the new products has been outstanding and it has opened many new doors for us as each new product appeals to different types of distributors."
"Our products are currently carried in approximately 8,100 stores, on more than 26,000 retailers' shelves throughout North America, with each store offering approximately 3.21 SKUs, and that number continues to expand as we add more products in the coming weeks, including Five Cheese Stuffed Beef Meatballs, Chicken Parmigiana Stuffed Meatballs, Chicken Florentine Stuffed Meatballs and Bolognese Sauce and Rigatoni Pasta."
Mr. Wolf concluded, "We continue to make significant strides in building out the MamaMancini's brand and believe we are on the path for continued growth. We continue to allocate dollars towards our aggressive marketing campaign, which has been successful on satellite radio and in conjunction with our social media presence. We also continue to believe that the demand for all-natural products is strong as consumers today are becoming highly aware of the ingredients in the products they consume. We are extremely excited about the progress achieved to this point. We believe Fiscal 2015 is off to a great start and should be one of continued growth, especially as we ramp-up production of our newly introduced products and add new store shelves in the coming quarters."
It is important to note that quarterly revenue in the Company's business is subject to variability given that the Company works with a large number of mass-market retailers. Each retailer has purchasing and promotion plans that become active in different months and quarters throughout the year. Consequently, from time-to-time there can be a concentration of orders in certain quarters resulting in uneven revenue results for MamaMancini's. Recognizing that revenue may not be evenly distributed on a quarterly basis, the Company's overarching goal is to achieve consistent annual revenue growth. The Company hopes to generate breakeven financial results as it approaches the end of the current fiscal year, which ends on January 31, 2015.
Original source: MamaMancini's Holdings
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