MMMB - Earnings call transcript Q3 2019

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Operator

Good morning and welcome to the MamaMancini's third quarter fiscal year 2019 financial results conference call. All participants will be in listen-only mode. [Operator Instructions]. Please note, today’s event is being recorded. I would now like to turn the conference over to Joe Diaz with Lytham Partners. sir. ahead, go Please

Joe Diaz

to today are conclusion Chief which course question-and-answer the the And of to Morgenstein, open all this not call the by statements we the for XXXX. of review Exchange begin the third year Officer; for Rocco. At Securities And call With conference Chairman historical XX, a the joining forward-looking the Executive us statement. we following meaning today's MamaMancini's you Carl us Section session. the XXXX, management fiscal of amended remarks, today the considered quarter Financial team those as and on submit prepared thanks you, the XXE October record will Larry call XXXX of are of facts for XXXX. and XXA on with to be of for Holdings are the Section ended prepared Thank of financial Brown, made Securities Act of Officer; the within President we of that and Wolf, Chief of MamaMancini's remarks, Matt and Statements representing before MamaMancini's Chief during Act Operating Officer. of results Holdings

describe by expected, expectations, anticipate, eventually and words Forward-looking draft, plan strategies statements planned, preceded future should, will, plans, projected. such generally future, are or results or as may, or

risks by the result XX-K company multitude may the factors with Securities in to various the circumstances, You identified in other Exchange materially year risks are including those events differ filings XXXX January cautioned and the forward-looking results from to XX, for differ ended a in uncertainties made statements, and other of and of results the those Commission. as the risks from statements that a company's forward-looking actual that fiscal subject are cause the or statements and materially could future such that projected projected

of that statements. and now as the Officer to results of let Executive no Holdings. analysis today. forward-looking obligation The the company management's Chairman any publicly call Carl reflect With only me release said, Carl? Wolf, Chief these statements Forward-looking of to to undertakes over MamaMancini's turn revision

Carl Wolf

We us Thanks morning. for today's joining interest call. MamaMancini’s. on your in continued appreciate Good

we indicated in third solid On July in yesterday's a the I were As comparable sequential last press up quarter ended release, XX% second in the basis, turned fiscal the versus performance XX year. revenues a XXXX. quarter XX% and quarter versus of

a retailer as sales product acceptance, impacted come relationships changes chains During in customers, were of our it to usually the grocery to offices reflective relates no second effect negatively major of not by major managers at quarter, MamaMancini’s. or number the go our purchasing consumer purchasing in and trade quality,

to we basis in I the the case. third expect the be out the by can at benefited reported suddenly the quarter of call, in has event million, buyers. $X.X conference that change the continued quarter product more impact. XXX the in XXXX. we record, dynamic quarter and quarter approximately second a to Sales favorable fiscal previous a reported and impacted points million in XX% the up we negatively for consider a turned by versus Margins and expense said any we the control. mix second were $X.X a $X.X one-off second quarter results where and as of came operated conditions change in the long-lasting the that a did for However, not were by million That quarter, third In as business

slightly net reduction in like in a by which net affected amount the operating the same so cost profit, of goods, X% of our higher about terms even income. resulted also gross a expenses, depreciation in it’s though in was that incurred the We profit, expenses was gross in which offset effect,

our XX,XXX to to is locations product between retail to the in retail expectation spots XX,XXX placement Our grow compared partner just quarter. spots to the in completed XX,XXX

flow cash the finance growth be sufficient will half of the year going expect than more in second We the of forward. that to revenues

As last investment Company, category. experienced Kernick Advisory investigate Akin Akin in year, organic Kernick foods natural shareholders in bankers options Group, partnership we with announced retained Bay to we and have strategic MamaMancini’s. the for and the are Bay of independent

Directors current environment, business, shareholder larger in time strategic merger include manufacturing might feel the guarantee occur. if strong no and competitors Potential the evaluate that to the acquisitions, substantially any appropriate company possibilities. the There this will and the Given an economic of is and food management enhanced. options recapitalization is investigate with value of US Board a company transaction be other or can

the our extremely given positive of the review. deserve However, shareholders comprehensive fundamentals economy, a

At comments, alternatives to report the February is which the this to turn am and expectation I a operations. of Our provide to Larry's CFO, for of Matt first XXXX, in our early will sometime numbers. call have Brown, a our on XXXX. President the Larry begins on on determination point, over strategic fiscal After Morgenstein, his going X, quarter review COO,

We then open Larry? will call the questions. your for

Larry Morgenstein

a fiscal in the you, revenues the of as generated a the Thank locations for increased XXXX. million XXXX. result primarily compared of volume Revenue more higher the October quarter period XX, Revenue XX.X% during same fiscal quarter XXXX increase Carl. product quarter compared in for to was ending selling $X.XXX million, first $X.XXX to

This by percentage which of quarter in for the $X.XXX product all XXXX. product increased during a sell firm change XX.X%. XQ net even of was merchandising fees. Total increase quarter Third by $XX,XXX accounts XXXX fiscal expenses an operating of mix operating larger profit operational for was of were increased to quarter This X.X% the the favorable versus XX.X% as that expenses quarter gross though to in increased approximately saw sales to the more from fiscal million XXXX a percentage sales year's prior caused gross profit XX.X%. showing

Net expense income allowed was to ago. for $XXX,XXX spending income fiscal XQ of down for position continues to fiscal Partners as XXXX. let the XQ was the MamaMancini’s into at XX, to tight compared XQ point EBITDA renewed our fiscal XQ Matt our to increased me the operating of company cash income over loss XX, XXXX $XX,XXX. Operating X, to Epstein Officer. completes XXXX. a period $X.XXX compared as $XXX,XXX the in Net pay October XXXX to was Brown, Joseph the my was closely recognize operating Hill $XXX,XXX XXXX. passing debt turn XQ XQ $XXX,XXX the and and October increased million flow production, as Cash control XXXX comments. $XXX,XXX for That through efficiencies compared firm. was year to approximately The to The implement The XXXX XXXX $X.XX Manatuck XXXX. reported of XXXX to by was integration company call same the compared from The company's And principal. Matt? profitability has XQ quarter activities in zero completed President to May fiscal XXXX Operating to $XXX,XXX in Chief of as compared note as per of share oversight. of $XXX,XXX long-term fiscal XXXX. The continue We monitor $XXX,XXX. company for

Matthew Brown

Thanks, Larry.

with have MamaMancini’s efficiency to revenue. regards production, only have success record-breaking fiscal As quarter, overall last the that to in a to regards pointing a a I'd it of Larry add efficient like have quarter did month record-breaking for This been Not and out, had especially the we to record-breaking Carl to contributed production. of to quarter the the plant QX. production. continued profit greatly gross with

call our with our full the can about Fiscal did you right last on quarter, of the that what the witness me talk plant infrastructure. first do the completion those For QX heard renovations. plant was quarter

of becoming the sausage again few five the on on projects. control, airings of manage QVC staple QX quarter. call the introduction plant continue sausage the of moved stuffed as TV. and also we our about taste what consumers QVC inside one Even freezing seven them. and in this more peppers continuing Italian taken and we’re our through more the to retailers, product were September, of thanks We've that a August and temperatures remain Fiscal in our we the QX the fairly on runs see course, QVC onions for as on control authorizations With well production enabled late off. warm, traditionally to had prior product major our to kit saw our the us outside, the product, beauty product peppers anticipate have and paid With days. to through let which we’re growth to sellouts us what fiscal days the this and as of which, we for environment in into ability capacity labor sausage better temperature-controlled production in produce into than quarters, to new the of We aired would already Dan's a

Our we QX. which the an speak, to anticipate R&D of East before staff fettuccine add Alfredo, account, Coast as currently launch working we active the a is of first chicken end fiscal with

to fiscal to XX ability that at at up is our continuing will to not level our indications of at the the Alfredo, These and high-quality to growth costs. offer that inventory completed perimeter will strongly In level. a are fettuccine kits to store entrées enhanced also assembly offer XXXX. fine-tune will products it protein-based the supermarkets our managers. the addition these R&D by All offer by consumers, move few greater the choice store the be is least we and control the in overall we but to be the level are prepared into help that the store supermarket greatly only should as for kits kit more pasta X It belief

our now Lastly, anticipated us to back back on about to to I call a start. in-house that, begin This our of at enable micro $X,XXX With savings to we’re to and the nutritional with plant, analyses the turn month over Carl. products, now like into will on there $XXXX just the laboratory. cost would lights the turning

Carl Wolf

Matt. you, Larry Thank and

say we note. Fiscal be the take up year a shaping to we XXXX let your questions, on MamaMancini’s. me to solid Before conclude another year that expect strong is for year

in We end the XXXX. fiscal expect to XXXX into from number first major fiscal a half around of have of authorizations new near grocery that country kick the retailers the of and we

dividends rates. Manatuck pay higher our national and sheet Our and at to that focusing arranging of our bank margins. elevated contributed retiring continue steps accounts to large balance strategy note traditional and favorable with also levels taking growth financing Partners our on operational by Hill We're to efficiencies reconfigure of more

of annual sales. the capacity of $XX the expansion, planned million upwards completion $XX our to now support to With we of have

excited milestone open are We the fiscal the to opportunities that, to With and continue ahead let's with make toward in we your call progress that XXXX. questions.

Operator

first question of Taglich today’s And ahead. go Instructions]. Please comes from [Operator Howard you. Thank Halpern Brothers.

Howard Halpern

to Congratulations. the second quarter. of Great Great the start half year.

Carl Wolf

you. Thank

Howard Halpern

of, the terms that gross In kits expand down that is help on road? I are to guess, tap, the going margin

Larry Morgenstein

will same to Should gross level, the our overheads. we adds product our product the about XX% gross go same. level The much The higher business. higher pretty kits the between sales expand have and line, plant are XX% volume margin more be with fixed as but existing incrementally profit relatively through margin pricing as operational

Howard Halpern

Okay. And shift of… expenses permanent third what that operating from the in of G&A sales? quarter, cost expense That’s into in a or occurred is shift

Larry Morgenstein

Yes.

Howard Halpern

XX,XXX. …[indiscernible]

Larry Morgenstein

Yes.

Howard Halpern

comfortable but going up expense the we’re where pretty level incrementally you from controls, pretty talk just Okay. right comfortable – G&A at And about I now? you're with know you're

Larry Morgenstein

royalties freight, – G&A XX% of expenses, of are around sales, our That’s a sales. of of direct commissions, sales XX% promotional merchandising variable sales. Part –

expenses other relatively The fixed. are

Howard Halpern

talked authorizations And coming the road. the Okay. about you down

your and year, units of do the next a of had locations? number quarter hope crystal ball, in you see you to where how retail many SKU If by second

Carl Wolf

be SKU are reasonably If we would the we indicated around country. authorizations successful across locations with XX,XXX

Howard Halpern

Okay. the question about I third… had another

Carl Wolf

XX,XXX up It’s from now. right

Howard Halpern

– third sustainable into quarter, the the is this per level $XXX SKUs that About SKUs that forward? initial of a consequence revenue, highest, the Right. was divide going a approximately. with your Is per SKU or the customers

Carl Wolf

we our as forward. going continue increase should business It

have replaced them As that SKUs we we’re SKUs or that lower out higher lower with customers volume. at volume call had volume,

So, store. increase that should per

Howard Halpern

Okay.

this how Coast, continuing West I But up? shape before. that asked to I've think was

Carl Wolf

seen We material have sales Coast. West any from yet the not

expect store and in to January However, is we have or delayed club we in a February. What tend get authorizations number which things happen business. supermarket to happens of

now, we been authorized. right So, have

to So, number locations of waiting orders and of we in the first SKUs. a for number are begin

Howard Halpern

there is for any also, And food point? service, Okay. I laid guess, that this being groundwork at

Carl Wolf

right have the to now date. service we activity We any not in done No, have really so to major area. do supermarket food in much

Coast West agenda marketplace. and kits absorbed mid-year. our get into to is want for that on We However, get the these the two

Howard Halpern

great Thanks. Okay. And up keep the work.

Carl Wolf

Thank you.

Operator

from investor. question a Today's go , Instructions]. private Herb next ahead. Please Fleming [Operator comes

Herb Fleming

have nice It's the an want of quarter comment, it, not couple quarter redundant. Is morning, too last order. understand everybody. previous questions and that as I versus I rebound a authorization, I the it's Yeah. hope indication An to Good is interest. an of a I correct? year. in not and

Carl Wolf

the that an Then authorization or is an An is order, Not the that actual buyer office chain order. said actual approved. you're commitment. buying an

buyer However, we’ve seen may it happen. A change.

New is buyer happened April. we comes with don't too the have October, and their it change mind, It buyer Or you don’t it to in the sale. want we’ll get which retailer in a late. have in major just may

you don't – you a it. very get but you high order, get until indication, have until the have So, order you the

Herb Fleming

at with were which the regard third move gross year XX.X%? Are range, What to do margins. XX%. looking the at you've I discussed Sure. was margins are you to to looking your be at A It’s quarter. in or understand they for past, we XX.X%, I up you which you going expect Well, going XX% the to question that. forward? for

Larry Morgenstein

explained, I lowered that. higher depreciation which cost number we in as Well, goods, of a have

So, running parallel more had what you’re to you really before.

we should higher with sales, to However, XX%. XX% up move to

Herb Fleming

right. around expect keep XX%, to you your to able SG&A, Okay, all be XX%? it And then,

Larry Morgenstein

of Actually sales as go percentage down a have as increased. sales our

if be get should sales. we higher we So, substantially can lower

Herb Fleming

vendor your balance are or with it days and regard questions, accounts financing Question more. payable, appears Okay. to XX sheets that payables

to expect ability you you months? to they vendors? next more volume, extend in that able Will terms pressure your nine Or to the in credit? do a finance of have increase order to fact growth dollar the create your six have to to from Given would be the over you refinancing the

Larry Morgenstein

We commitments. working capital have very significant

pressure any see not do we So, there.

Herb Fleming

you current under lines? the have your availability So,

Larry Morgenstein

Yes.

flow positive We have to very months. cash our available. reduce And several interest resulting we in next expect rates with substantially the

Herb Fleming

million made certainly with that we last at regard a time. annual $XX Okay. $XX to months the rate you've $XX I XX run million. early to question to the $XX some on? this hear And at rates million over looking run is, aggressive didn't point to statements Are last million

Larry Morgenstein

I been are they We’re commitments dates. would looking What first be to between – back, quarter. have going start number of is and XX say, happened they a by second the and we have pushed into quarter, But had there.

that same of So, run rates. we in are with terms feeling

Herb Fleming

hope I do can I modeling you. it Okay. continue appreciate Overall, and to my continued All you. right, much. thank now very to success and support I

Carl Wolf

Thank Herp. you,

Operator

comes Please question next Fred Orr, Today’s private Instructions]. a [Operator ahead. from go investor.

Fred Orr

very Thank of from you the the much. my by were questions – caller’s questioning. last Most line answered of

Thank pass. I’ll So, you.

Operator

final back question-and-answer conference gentlemen, like ladies I’d team your session. and remarks. over this turn the to And, concludes the for any to management

Carl Wolf

for of with day. participating like a We I’d results you all to think on talking the to forward great fiscal review call. Have quarter. again the today's look to final you

Operator

Thank you.

Carl Wolf

you. Thank

Operator

all for thank call. conference We attending you today’s This concludes today’s presentation.

your have a wonderful You may and lines day. now disconnect

Mama's Creations (MAMA) 12 Dec 182019 Q3 Earnings call transcript