MMMB - Earnings call transcript Q3 2020

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Operator

Good morning and welcome to MamaMancini's Third Quarter 2020 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded.

I now would like to turn the conference over to your host today, Greg Falesnik. Please go ahead sir.

Greg Falesnik

operator. you, Thank

securities started, This get historical a about the disclaimer forward-looking Before call I'll may statements. federal of meaning conference within to regarding contain forward-looking MamaMancini's. statements we the read laws in information, addition

not include, about or are that predictions express to statements company's events statements projections statements other estimates on relating intentions, Forward-looking current made assumptions future limited expectations, or earnings, These company's activities, beliefs, statements based business in based expectations, are but on the strategies, any the to management. its and conditions. part by

due statements performance results what and predict. uncertainties These to Securities vary the numerous guarantees the to not Exchange difficult statements in actual or time from is report Therefore, are likely U.S. in which other in of documents discussed from may and involve the and to materially expressed time are that future and risks, with forecasted factors and this company Commission. files and to outcomes are assumptions forward-looking differ

such statements the could management and materially control. related company's availability by factors affected cause to other statements among major the any be risks key regarding of the uncertainties that in forward-looking results those litigation and to beyond from may actual loss differ of company. include factors, Matters capital addition, personnel, In the

conference time this that best analysis management's of sensitive only reflects In the this information contains of date call addition, and time conference as call.

this the may Further related statements or concerning any future information in arrived materially in events, to company could date company's after that periodic found does any reflect the performance conference this to contained SEC. with financial information The forward-looking or filings statements publicly call. undertake presentation forward-looking that to of revise be not issues affect obligation circumstances update the

I'd Chairman the floor Chief yours. Carl this company's is At like the Carl, and call Officer. to turn to Wolf, over Executive the time,

Carl Wolf

to like today. quarter our everyone welcome and conference third for thank I'd you, joining XXXX you Greg, financial you Thank call. us results to

highlighted of market nationwide, by quarter of third quarter aggressively with growth option a Meat. as revenue a record our the product products include continued The well partnership as Beyond in expansion as fiscal we XXXX to line plant-based was our

we're record with XX% million third increasing quarter in end, with drove that income million. our progress very to To to pleased $X.X sales which record net a X.X the

by revenue new events, placements, merchandising marketing continued growth multichannel and our driven was success effective Our average. of

We of This fourth-quarter XX revenues have growth also XX% show increase with results approximately given continued the is expect of an prior from quarter. we the for guidance sales year. that to million

marketing multi-brand now. successful few Our efforts social like include touch a to these work media efforts, QVC. I'd continued on campaigns, radio and with of

radio distributes We year plate. platform Thanksgiving campaign continue see the campaign as our evidenced our XXXX advertising commercials over success to of this launch estimated an fifth in the Sirius The holiday. MamaMancini’s by SiriusXM per

expedited provide into commercials for market new segments entry The MamaMancini’s.

in We news sorry new and many talk all major on are placing folks, products channels. the,

million Let customers new commercials with and The consumers, channels reaching of our cost effective locations an current an drive all way on me over across SiriusXM distributes products. XX that which major various geographic platform a talk MamaMancini’s over estimated explain and found news avenue sales have again. to XXXX

likely likes retail repeat five specific of within deal continue On of media engaging purchases. and target to encouraging customers the new to we consumers side and we social continue live Today who a reach things, maintain XXX,XXX robust locations. have miles

the Pasta example, Bowls to introduce are believe with in our recent presently product of this resonate new As an using well accolades that We Southeast. our medium launches we consumers.

impressive their driving Mr. live notable pitches seen platform. have as Our with success Mancini's QVC well sales on efforts

notably as a have result. presence encouraging seen have We on-air and recently our growth increased

available is is QVC aware, marketer States. and million homes over in As are many the of you world's XXX the United throughout direct-to-consumer largest

turning to Beyond on partnership account touch with and some call our of growth, like new recent over Meat. respect success to recent I'd and existing with our Before the product Larry, to placement growth

quarter over Publix During in XXXX authorizations expect we new retailer quarterly locations Sam’s revenue Albertsons, add which including to more Kroger, grocery at and continued XXXX. X, to to Tier-X add Club, quarter fiscal we starting the

In with provided months positive. addition, in XXXX adding we locations is an next retailers have the additional acceptance several potential of consumer these the

the Beef Several fourth new our innovative Sausage Meatballs Peppers, We new XXXX Meatball both to including and which Pasta started Meat authorizations announced Beef Sauce, also and new and and Bowl lines n Pasta Loaf for four quarter recently supermarkets, retailers of existing of in products, Entrees.

we One new of to excited plant-based is using line Meat. foods introduce of fully-cooked Italian authentic a with most are Meat new Meat's about partnership our products Beyond the Beyond Beyond

Meat exciting rapidly is for new real having segment I'm a a the market an entree leader Beyond in sorry plant-based we MamaMancini's. growing market provides guys, and clear expanded an the – partnership into meat believe today, problem

shortly our placements this with shipments this announcing be to first expect We for beginning quarter. line

several firmly marketing effective a significant manufacturing shareholder addition we in established believe product we foundations fiscal as move receive paired will with XXXX, season to lines us have with fiscal our QX which efforts for date capabilities value The have to help strong In positioned of expect holiday strong forward. we buildout drive XXXX. new the into forward placements going we additional of our

some like Chief turn forward, details from quarter our before third Officer fiscal the of Larry? through XXXX. walk to the Financial Now call to over I'd key Morgenstein financial to going Larry

Larry Morgenstein

$X.X the Thank primarily for revenue increase $X.X you, year-ago the The new as current the XXXX was profits million a in and compared quarter in in XXXX of quarter quarter ago. of year customers. the Carl. fiscal increased sales increased a increased $X.X third to with third to Revenue million of same XX% quarter. X% Gross $X.X to as fiscal million result compared to million same

and same sales. a mix product XXXX to ago, gross in quarter X% revenue the expenses to compared which of year in of as change comparable period primarily as percentage year the profits in a quarter XX.X% comparison the impacted negatively of due profit in XX.X% Gross prior third higher depreciation by totaled to

expect to efficiencies. our gross grow we increase result to as a sales, continue manufacturing margins we As plant of profit

Operating fiscal expenses XXXX in quarter. basis. Operating million the increased due third $X.X increases operating in ago in a of $X.X on expenses XX% to a as of freight. to from compared million sales XX% to primarily expenses totaled year quarter decreased same the advertising year-over-year Notably percentage

in a third the volume, the share to net record amortization interest same attributed grew fiscal income primarily was for income in XX% a $XXX,XXX of lower $X.XX income increase in Net increased ago XXXX. quarter. as of compared per to share of year $X.XX or product $XXX,XXX or quarter XXXX and to net The expenses

raising as $XXX,XXX January Cash flow XX, for the $XXX,XXX cash ago. are not hand We $X.X go. operations equivalents Cash as capital to anticipate the XXXX same $X year additional to of that fiscal period XXXX. totaled in million and confident on from we of cash as compared do October a operations year XX, million XXXX as compared and of is sufficient to was sustain

up improvement and wrapping XX, XX, outstanding XX stood payable to days financial at before We XXXX. days XXXX. basis outstanding XXXX base when of our consolidated January sales at on at a This payables. October October touch Finally, want notable days is XX, I to XX.X as and compared payables the XX.X sections, outstanding

XXXX from extract pricing continue expect to payables improving as terms fiscal and the we continue to better through We vendors. outstanding

This my comments. completes

call me Chief Let Brown, Operating our turn over Officer. President Matt to the Matt? and

Matthew Brown

expansion. sales plant of requires planned Thanks investments and plant. for Larry. the a year's Increased at in increased equipment worth production We this with

the that were we was hope runs of the in began new growth. developing this challenges successful control While production that My fourth it hitting growth improve for numbers significant larger the and new record with quarter procedures our spent management good team come continue quarter. we quarter, this margins without our evaluating as a planned we will the not production portion into

higher and that we Initiating focus capacity keep working out be procurement plant. essential production forward. our suppliers moving of is schedule always par within raw our work better levels footprint times with us existing to a will the lead as will team a strict at the enable Increasing of to material

to fiscal the in that to began costs fiscal in these and rise continue the labor in that again researching more lower help for the prepare months will We effort in will next increase believe the automation few investments over margins. costs technology and offset We in QX QX us XXXX. began production, inevitable our desire better improve

we in this growth As time need our continues, cannot and area. this to investment assurance to balance quality equally the and neglect our dedication

fifth proud say to wrapped again in flying and annual that passed with Quality Safe I'm QX audit SQF our up or we Foods yet colors. We

past. fraction micro of paying for itself been we has systems at in lab the laboratory of in-house testing cost outside a the perform Our all as

that Chef the spearheaded about. product Department Styler development on our R&D Our by been Carl has Executive has Chris of talked instrumental Beyond

was and carbon marketplace, to excited We quest are great of for about it with meets a the a us the plant-based very opportunity a team tasting this effort lifestyle come meatball. desires vegan new that the friendly continued the truly product and up for

fiscal meatball, we and to chains developing been club see QX. a addition that of items new stores have large this we to In the Beyond national several at number expect

has customer years process and at existing ERP NetSuite reporting. inventory facilitation of begin Finally, and food as information, record position a manufacturing will Oracle's we for in part data, proven signed and and of and the systems us experience production on logistics research we WMS plant, the with improving controls better program expect this and NetSuite new our to transition investments this planning, operations product procurement platform track financial transferring accounting have with financials, we'll and control, of

XXXX. be We middle this the fiscal by running and to expect up system of

before the call some At the wrapping Carl? this I will final notes point to Carl over back for up call for Q&A. turn

Carl Wolf

and you, Matt. Larry Thank

incredible shareholder I noted forward operator. operational for continued I the laid in opening we it as creation XXXX. With the continue my turn I'll closing growth. to really groundwork we've and value over Operator? execution XXXX and a fiscal of our that, to remarks, As fiscal strong look

Operator

yes. you, Thank

Brothers. question-and-answer question Instructions] with And the will now from begin We session. [Operator comes Halpern Howard first the Taglich

Howard Halpern

Congratulations, great quarter Carl.

Carl Wolf

Thank you, Howard.

Howard Halpern

million at $XX depreciation QX, you is margin excluding least gross product revenue a to might in or the restrain margin gross take? that amortization for be the for and going forecast mix sequentially the improve there will With that

Carl Wolf

so XXXX of result quarter and volume We additional there's in more think an gross stable that will in a we volume factors the margins. variety overheads, quarter in should this and additional first as plant do be in there higher relatively of so whole margin improvement for

Howard Halpern

going Okay, XX,XXX incrementally to locations, increase and about your you is it past the that talked one - talked I like overall? we've in the, the location. increase to Is to think to some Because going locate I grocery about authorizations that guess XXXX-plus degree?

Carl Wolf

get you a Yes, but reporting to new the location, you're not because location more group of store, that location are And with different are substantially going associated a types do volume locations. a there per we than of grocers. club

because misleading. you would So we going anymore. in better higher location. are it's To that have really Yes versus locations are but it give reporting we not have in The approximately that new we we XX,XXX. volume are way stopped it XX,XXX per after a reporting much idea increase a supermarkets

Howard Halpern

offer, marketing new I Okay, And of plan an with new then, in locations? of the the and think locations, will help into yourself potential and to establishing new XXXX locations okay, the or quickly and be these results of these helps. your drive authorizations? terms how able getting to additional mean expansion those determine do you successful is was that you'll and be What achieve new what into that the what sales

Carl Wolf

but by looks that test saying of will know we December promising, some believe is believe looks until get we and and we now answer end of answer the a that it was the I on really it good. that, comment what full on the that final we're - We can't very but basically right it anyway

Howard Halpern

Okay, you what it was growth have existing year-over-year? and customer if

Carl Wolf

XX% customers about - for our and largest skews Our customers are XX%. somewhere growing largest between

we So customers, volume high largest are at our existing existing customers. growth in our very, very

Howard Halpern

of move I - plant-based touching in your the into food service I the stand on, cycle authorizations where the now that that and does potential effort terms and of Okay, initiatives, guess help the going guess forward? does

Carl Wolf

first helps efforts substantial order service. plant-based a We believe as We substantially. have in of the food now not had

lot will first expect growth we year to shipping on, going the There it modest activity. don’t and first a have after the is before but areas yet. We Canada other we activity see be of orders orders

Howard Halpern

a quarters be to work system. moving to about talked any you lastly, and Okay that bump software Is infrastructure new onetime bump SG&A a or effectively? to couple going in make there transition of

Carl Wolf

over advertise of Most the material in reasonable a put bump. was a - see don’t what period. I is

So manpower we on manpower think are XL procedures control manually other think hand increase decrease. however, certain on we have have are we think that aware done we hand; the that the and it some SG&A a we expenses will an I modestly where will or that one

As made a operations a made long freight. about you're brought lot we've progress conference talking up question call, on the last which in as you quarter of

And some very December part a changing of showed starting third the efficiencies we've bit up seen improved nice this showed by some really consolidators. quarter, reflected. logistics, that so But in - little be in very, this quarter and will quarter

marketing Also new product two in developing distribution. months tried the out on as into there marketing first heavier we and to expenses expenses is some customers get

who older we the quarter right bit have now, above are we'll new on the in see and most So customers in expenses now not the but coming a those little part what four over. major third customers for of but came in, that,

Howard Halpern

keep Well the in work. Things up the right great thanks, moving are direction. and

Carl Wolf

you. Thank

Operator

[Operator Herve question Instructions] comes a Private the Fleming next And from Investor.

Unidentified Analyst

this morning on to couple Hey, report same? and you next product the today. enhancer first question margin congratulations I do and A is a year be going have. expect of That's good your plant-based if the or of may. percent gentlemen What your I questions

Carl Wolf

It in Okay, changer. well our really as new volume it's projections a now as plant-based could major frankly right area. not shown game such a be are official

We of customers. shown a have to limited number it

in now very procures, refine near good, stand that be make production We'll So as the source we that. runs right. want were announcing to phase. progress to we make We're supply future where sure sure the was on recipe, past

we projections, but game rollout a in be we could it for the as very So will conservative our be changer company.

very well Tremendous being game, in received is general. but the product

any think our will are if people I - Micro we minute, XXX be in am XXX there be tasting tasting you talk LD about are going will I at for itself We to of the a doing meatballs to lunch. which

yourself. going So save if you are

margin maybe lower terms as percent higher So a is in the price of of substantially the anyway sales, but margins, a pound. drop selling per

will good per margin we pound now. or sell the be actually than So as what better

Unidentified Analyst

next what of is, current percentage to what question in Next service the food be year? food you service volume do expect your is and

Carl Wolf

we hard Food authorizations projection. would service is modest what and are modest put very have, official indication into Anywhere of projecting it a volume is I or right don't we call, now very to where increase. authorizations

significant on year. year expect for where So sort we have next or of right we now our projections interest are we authorizations verbal very know mainly or interest based do substantial next increase

contribution There that do want goal that our our toward thus profit, is our and I and is incremental our pricing XX% authorizations we range. products are operating new something between new in far and to mention, XX%,

substantial have we So operating and hope, if we do incrementally as get run our sales should we the business we a very-very increase increased in profits.

Unidentified Analyst

cap you leases? is, do year including of look your expenses I significant or a capitalized view What leases the this question have coming point past incremental Okay, in additional last have I noticed number the capital CapEx year. from for

Carl Wolf

change were leases. us a substantial real There that in any all much it a major and our asset. just lease and the makes is difference accounting form, as but of a than The value or take wasn’t show accounting new leases as that an liability also procedure

So a misleading. that's

additional very we opinion that and talk CapEx than amortization still more cash be have depreciation Our do in CapEx if to think M&T $XX,XXX also Bank. a should together. strong for month, next from than We flow being My about $XX,XXX appreciated. not commitments not the rather not will is substantial financial much do terms our because is of put year CapEx be

Unidentified Analyst

of this you thank with M&T bumping question some up your your relationship usage My and will your be in a availability do as upper percentage you'll or credit? is, your your against good, time be limit last Very you. decrease revolving see

Carl Wolf

loan Bank million $X M&T to Our under right down is now.

long term the of at $X.X loan was million Our year. beginning the

for just We availability the a line safety next substantial valve increase have year. and will we line

extension. rollover We asked also New our on capital in become will working one January to the another two-year we've a XX one-year what commitment expect for in and is Year

have good and are our we feel very credit So [indiscernible]. relations we ample

Unidentified Analyst

performance your very those has much very and you need. sure against I'm get you'll responses. for reasonable been you Your numbers what certainly Thank

Carl Wolf

Thank you, Herve.

Operator

And Capital of next McGregor Steven you. from SJ [ph]. Thank the comes question

Unidentified Analyst

to are point? wondered this about at I QVC characterize Carl what if you thinking ready we're

Carl Wolf

Well, like we QVC lot. a

If you you overexposure yourself QVC on your business. start own cannibalizing

are a on we two So live from QVC times anywhere to eight month.

ship QVC happy. we sellout. are for us nice their go who number know great very a as ship we and just But marketing business We programs very are consumers number show two order their online is we products and one or and on order. direct also we're and tool very, on QVC to a often do often

we substantial and but for you limit us relationship, fine we So problem that, a additional like can with with see to it's big see, on are great have but no us. that's QVC we growth and QVC how would there get to

Unidentified Analyst

in And is, I point to next wanted at will what going make year? we're we what the the profits be to about and to revenues ask of projections see some kind ability other question

Carl Wolf

only taking very year. quarter-by-quarter now year are feel we've over be the Right very confident We we it past. as this in next will strong done

Unidentified Analyst

very you much, very Thank done. well

Carl Wolf

you. Thank

Operator

you. Management. MKH the Melas George next with question from Thank And comes

George Melas

gentlemen. morning, Good

ask of So is about gross impacts product some a just yes, came gross gross in fourth the that little to sort in could you discussed there growth quarter late, already, factors there on in other I but XXXX? mix and want how I margin. bit just margin to understand margin in but in that if Maybe

Carl Wolf

fix followup plants on gross before we fourth more as as the capacity, quarter increase will margin in Well, relatively we our because overhead. think mentioned I

margin. comes higher gross down that to So

control discussions, we some think in costs. Matt in effective mentioned as his controlling procedures some will have implemented As which as be we've we far instituted plus

happens margin far major sales fees As as some large customers agency and gross may is, no expenses, expenses, merchandising our but lower have what with lower we very freight. promotional no negotiate lower

number margin, line, that, your So key if us mix or in the quarter. higher lower to gross So stable. some and gross we gross volume do moves fourth is same you see like profit but time We toward bottom what it see overhead? margin the the margin your operating our contribution increasing is to at will – the keep your do help the

part of equipment, part depreciation There year, of new was also was higher procedures. accounting it this was it

that better. last compared and should be to year out even gross should margin So

George Melas

to P&L, Just it showed you so actual flows mean but Okay, don't how product understand product, mix have through the the the you necessarily by you mean comment…?

Carl Wolf

should They mix. mix than be customers rather product

George Melas

okay. G&A And then you right? expense is what in you, that that marketing would can expenses would promotional that and on, be be save in the Got and that

Carl Wolf

that the G&A. Yes, is

George Melas

good. very very Thank Okay, you much.

Operator

And would like this closing I the call Carl return you. to Wolf any at Thank to comments. time, for over

Carl Wolf

Okay, Thank operator. great. you,

I to and present we which on Main note, the conferences coasts mention attending upcoming and December LD XX. at that Event of marketing tomorrow continuing will investor United active we final Micro As the to including States in a top Conference attend wanted investor are both be on

our MZ Thank We plant-based a also will meeting be firm I scheduling reach us to update please to joining you management, part our of our the for IR interested progress. again before forward with Group today. in to lunch out to look on We arrange. mentioned you If continuing meatballs. with as

Operator

you now concluded. Thank presentation. Thank conference today's for has The attending you.

now lines. may disconnect You your

Mama's Creations (MAMA) 9 Dec 192020 Q3 Earnings call transcript