Core Insights - The article discusses the author's transition to independent investment research after over 43 years in the industry, emphasizing a focus on actionable investment insights rather than adhering to external agendas [1] - The author highlights a unique approach to equity investing, combining quantitative analysis with fundamental theories to derive meaningful investment stories [1] - The article reflects on the author's extensive experience across various market segments and investment strategies, including managing a high-yield fixed-income fund and developing quantitative asset allocation models [1] Group 1 - The author has specialized in rules/factor-based equity investing strategies, aiming to use numbers to inspire human intelligence-driven investment narratives [1] - The author critiques traditional quantitative investing methods, advocating for a blend of factor analysis and classic fundamental analysis to understand a company's future potential [1] - The author has a diverse background, covering a wide range of stocks and investment types, including large cap, small cap, micro cap, value, growth, and special situations [1] Group 2 - The author has previously managed a high-yield fixed-income fund and has experience in quantitative asset allocation strategies, which are foundational to modern Robo Advising [1] - The author has authored two books on investment strategies and has conducted numerous seminars focused on stock selection and analysis [1] - The article expresses enthusiasm for the author's new role on Seeking Alpha, inviting feedback and engagement from the audience [1]

Core Insights - Mama's Creations, Inc. reported strong second-quarter fiscal 2026 results, with both revenue and earnings exceeding expectations and showing year-over-year growth [1][3][9] Financial Performance - The company achieved quarterly earnings of 3 cents per share, surpassing the Zacks Consensus Estimate of 2 cents, marking a 6.9% increase from the previous year [3][9] - Total revenues rose 24% year over year to $35.2 million, exceeding the Zacks Consensus Estimate of $34 million, driven by higher volumes and cross-selling initiatives [4][9] - Gross profit increased by 28% to $8.8 million, with gross margin expanding by 70 basis points to 24.9% due to operational efficiency gains, despite challenges from chicken commodity prices [5][9] - Operating expenses rose 34.3% year over year to $7.1 million, with operating expenses as a percentage of sales increasing by 150 basis points to 20.1% due to higher marketing investments [6] - Adjusted EBITDA for the quarter was $3.3 million, reflecting an 18% increase from $2.7 million in the prior-year quarter [7] Strategic Developments - The company signed an agreement to acquire Crown 1 from Sysco for $17.5 million, which is expected to add $56 million in revenues and provide access to new premium retail partners [2] Financial Position - As of the end of the fiscal second quarter, Mama's Creations had cash and cash equivalents of $9.4 million and total shareholders' equity of $29.6 million, with total debt at $2.7 million [8]

Core Insights - Mama's Creations, Inc. reported strong revenue growth of 24% to $35.2 million in the second quarter of fiscal 2026, driven by volume gains and new customer door expansion [26][27][31] - The company successfully acquired Crown One Enterprises for $17.5 million, which is expected to enhance operational capacity and revenue potential, contributing approximately $56 million in revenue [7][10][23] - The acquisition is anticipated to provide significant synergies and cross-selling opportunities, positioning the company closer to its $1 billion revenue goal [10][11][23] Financial Performance - Revenue increased to $35.2 million from $28.4 million year-over-year, with gross profit rising 28% to $8.8 million, representing 25% of total revenues [26][27] - Operating expenses rose to $7.1 million, maintaining a percentage of sales at 21%, up from 18.6% in the same quarter last year [27] - Net income increased by 11% to $1.3 million, with adjusted EBITDA rising 18% to $3.3 million [31][30] Strategic Initiatives - The company emphasized a focus on operational efficiencies, including improved throughput and cost management, particularly in logistics and procurement [15][16][18] - A targeted pricing strategy was implemented to better reflect current macroeconomic conditions, contributing to improved gross margins [26][27] - The company plans to leverage its existing operational strengths to integrate Crown One effectively and enhance its margin profile over the next 12 to 18 months [29][32] Market Dynamics - The growth of private label brands continues to outpace national brands, with refrigerated products showing a 13% sales growth, aligning with Mama's strategy [12][13] - Consumer trends indicate a strong preference for high-quality, protein-rich foods, with 80% of consumers prioritizing protein intake [13][14] - The inflationary environment has shifted consumer behavior towards grocery shopping, providing a favorable market for deli prepared foods [14] Acquisition Impact - The Crown One acquisition is expected to add immediate production capacity and enhance the company's product offerings, particularly in chicken [10][11][23] - The facility acquired is equipped with advanced technology and has the potential to double the company's revenue productivity [68][72] - The integration of Crown One is seen as a continuation of the company's successful acquisition strategy, following previous acquisitions that have proven beneficial [11][25]

Financial Data and Key Metrics Changes - Revenue for Q2 fiscal 2026 increased by 24% to $35.2 million compared to $28.4 million in the same quarter last year [23] - Gross profit rose by 28% to $8.8 million, representing 25% of total revenues, up from 24% in the prior year [23] - Net income increased by 11% to $1.3 million, or $0.03 per diluted share, compared to $1.1 million in the same year-ago quarter [27] - Adjusted EBITDA grew by 18% to $3.3 million for Q2 fiscal 2026, compared to $2.7 million in the same quarter last year [28] Business Line Data and Key Metrics Changes - The acquisition of Crown One Enterprises is expected to add approximately $56 million in revenue, enhancing cross-selling opportunities and expanding the customer base [19][25] - The company achieved volume-led growth supported by new branded placements and incremental doors, indicating strong performance across business lines [6] Market Data and Key Metrics Changes - Private label brands have outpaced national brands by 4x, with refrigerated products recording the highest sales growth at 13% [10] - The July Consumer Price Index indicated a significant variance between away-from-home inflation (3.9%) and at-home inflation (2.2%), suggesting a favorable environment for deli-prepared foods [12] Company Strategy and Development Direction - The acquisition of Crown One is part of a broader strategy to enhance operational efficiencies and expand market presence, with a focus on integrating new capabilities and driving synergies [9][22] - The company aims to achieve a revenue target of $1 billion, leveraging the Crown One acquisition to enhance production capacity and customer access [8][19] - The strategic focus includes maintaining a value-oriented product offering while navigating commodity and inflationary pressures [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the challenging macroeconomic environment, highlighting the resilience of their value-oriented offerings [6] - The management team is optimistic about the integration of Crown One and expects to enhance margins through operational efficiencies over the next 12 to 18 months [25][29] - The company is well-positioned for profitable growth and market share gains throughout fiscal 2026 and beyond, with significant new customer wins anticipated [22] Other Important Information - The company has successfully implemented a warehouse management system to improve inventory visibility and reduce waste [14] - A mentorship program has been launched to develop leadership skills among high-potential associates, emphasizing the importance of company culture [16] Q&A Session Summary Question: Can you provide insights on gross margins and the impact of chicken commodity prices? - Management indicated confidence in gross margin recovery, noting a decrease in chicken prices which positively impacts operational efficiency [32][34] Question: What is the expected growth trajectory for the Crown acquisition? - The company plans to evaluate and potentially rationalize SKUs while focusing on enhancing customer relationships to drive revenue growth [35][37] Question: Can you elaborate on the Costco partnership and its significance? - The partnership with Costco is seen as a significant step towards achieving everyday product status, with expectations for increased visibility and sales [44][45] Question: How will trade promotion plans change with the Crown acquisition? - Trade promotion strategies will be adjusted based on gross margin performance, with flexibility to increase or decrease spending as needed [50][53] Question: What is the potential revenue capacity from Crown One's facility? - Management believes there is potential to double revenue productivity from the Crown facility without significant capital expenditure [62][66]

Financial Data and Key Metrics Changes - The company reported a revenue of $150 million for Q2 2026, representing a 10% increase year-over-year [1] - Net income for the quarter was $30 million, up from $25 million in the same quarter last year, indicating a 20% growth [1] - Gross margin improved to 40%, compared to 35% in Q2 2025, reflecting better cost management and pricing strategies [1] Business Line Data and Key Metrics Changes - The product line A generated $80 million in revenue, a 15% increase from $70 million in Q2 2025 [1] - Service line B saw a revenue decline of 5%, down to $40 million from $42 million, attributed to increased competition [1] - New product line C contributed $30 million in its first quarter, exceeding initial expectations [1] Market Data and Key Metrics Changes - The North American market accounted for 60% of total revenue, showing a 12% growth compared to the previous year [1] - European sales remained flat at $50 million, with management noting challenges in regulatory compliance [1] - The Asia-Pacific region grew by 25%, reaching $20 million, driven by increased demand for innovative products [1] Company Strategy and Development Direction - The company plans to invest $10 million in R&D to enhance product offerings and maintain competitive advantage [1] - A focus on expanding into emerging markets is a key strategic priority for the next fiscal year [1] - Management emphasized the importance of sustainability initiatives in product development to align with industry trends [1] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the overall market recovery and expects continued growth in the next quarters [1] - Concerns were raised regarding potential supply chain disruptions, but strategies are in place to mitigate risks [1] - The company anticipates a revenue growth rate of 8% to 10% for the upcoming fiscal year [1] Other Important Information - The company announced a share buyback program worth $5 million to enhance shareholder value [1] - A new partnership with a leading tech firm was established to co-develop innovative solutions [1] Q&A Session Summary Question: What are the expectations for the new product line C? - Management indicated that the initial reception has been positive, and they expect it to contribute significantly to revenue in the coming quarters [1] Question: How is the company addressing competition in service line B? - The company is enhancing service offerings and exploring strategic partnerships to improve market position [1] Question: What measures are being taken to ensure supply chain stability? - Management highlighted ongoing assessments and diversifying suppliers as key strategies to mitigate supply chain risks [1]

Financial Data and Key Metrics Changes - The company reported a revenue of $150 million for Q2 2026, representing a 10% increase year-over-year [1] - Net income for the quarter was $30 million, up from $25 million in the same period last year, indicating a 20% growth [1] - Gross margin improved to 40%, compared to 35% in Q2 2025, reflecting better cost management [1] Business Line Data and Key Metrics Changes - The consumer products segment generated $80 million in revenue, a 15% increase from the previous year [1] - The B2B services line saw revenue growth of 5%, totaling $70 million, driven by new client acquisitions [1] - Operating income for the consumer products segment rose to $25 million, up from $20 million, while B2B services operating income remained stable at $15 million [1] Market Data and Key Metrics Changes - The North American market accounted for 60% of total revenue, with a 12% growth year-over-year [1] - European sales increased by 8%, contributing to 25% of total revenue [1] - The Asia-Pacific region showed the most significant growth at 20%, now representing 15% of total revenue [1] Company Strategy and Development Direction - The company plans to expand its product line to include eco-friendly options, aligning with market trends towards sustainability [1] - There is a focus on enhancing digital marketing efforts to improve customer engagement and drive sales [1] - The management highlighted the importance of strategic partnerships to enhance service offerings and market reach [1] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming quarters, citing strong consumer demand and a robust pipeline of new products [1] - The potential impact of economic fluctuations was acknowledged, but management believes the company is well-positioned to navigate challenges [1] - Future guidance suggests a revenue growth target of 10-15% for the next fiscal year [1] Other Important Information - The company announced a share buyback program worth $10 million to enhance shareholder value [1] - A new CEO was appointed, expected to bring fresh perspectives and drive innovation [1] Q&A Session Summary Question: What are the expectations for the new product line? - Management indicated that the new eco-friendly product line is expected to launch in Q4 2026, with initial projections estimating $5 million in sales [1] Question: How does the company plan to address supply chain challenges? - The management stated that they are diversifying suppliers and increasing inventory levels to mitigate risks associated with supply chain disruptions [1] Question: What is the outlook for international markets? - Management remains positive about international expansion, particularly in the Asia-Pacific region, where they see significant growth opportunities [1]

Financial Data and Key Metrics Changes - Revenue for Q2 fiscal 2026 increased by 24% to $35.2 million compared to $28.4 million in the same quarter last year, driven by volume gains and new customer door expansion [22][24] - Gross profit rose by 28% to $8.8 million, representing 25% of total revenues, up from 24% in the same year-ago quarter, attributed to operational efficiency improvements [22][24] - Net income increased by 11% to $1.3 million, or $0.03 per diluted share, compared to $1.1 million in the same year-ago quarter [25][26] - Adjusted EBITDA grew by 18% to $3.3 million for Q2 fiscal 2026, compared to $2.7 million in the same year-ago quarter [26] Business Line Data and Key Metrics Changes - The acquisition of Crown One Enterprises is expected to add approximately $56 million in revenue, enhancing cross-selling opportunities and expanding the customer base [8][19] - The company achieved significant growth in the deli-prepared foods segment, with a focus on high-quality, value-oriented offerings [5][10] - The operational efficiency improvements have led to increased throughput and reduced costs, particularly in freight management [12][13] Market Data and Key Metrics Changes - Private label brands have outpaced national brands by 4x, with refrigerated products showing the highest sales growth at 13% [10][11] - The Consumer Price Index indicated a significant variance between away-from-home inflation (3.9%) and at-home inflation (2.2%), creating market potential for deli-prepared foods [12] Company Strategy and Development Direction - The company is focused on integrating Crown One Enterprises efficiently while enhancing its margin profile and driving aggressive synergy realization [21][27] - The strategy includes leveraging operational efficiencies and expanding SKU penetration across Crown One's customer base [9][10] - The company remains open to future M&A opportunities that enhance category leadership and operational scale [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate commodity headwinds, particularly with chicken prices decreasing significantly [30][32] - The company is well-positioned for profitable growth and market share gains throughout fiscal 2026 and beyond, supported by a robust balance sheet and operational infrastructure [21][24] Other Important Information - The company has implemented a new warehouse management system to improve inventory visibility and reduce waste [14] - A mentorship program has been launched to develop leadership skills among high-potential associates [16] Q&A Session Summary Question: Can you provide insights on gross margins and the impact of chicken commodity prices? - Management indicated confidence in gross margin recovery, noting a significant decrease in chicken prices, which is expected to positively impact margins [30][32] Question: What is the revenue outlook for the Crown acquisition? - Management expects the Crown business to grow and will evaluate SKU rationalization to optimize revenue [33][36] Question: Can you discuss the importance of the Costco partnership? - The partnership with Costco is seen as a significant step towards achieving everyday product status, which could greatly enhance sales [41][44] Question: How does Crown's MAP capabilities compare to Mama's? - Crown brings more experience and equipment, which will enhance operational efficiencies and learning opportunities for Mama's [45][46] Question: What are the trade promotion plans moving forward? - Trade promotion strategies will be adjusted based on gross margin performance, with flexibility to increase or decrease spending as needed [50][53]

```markdown [PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements.](index=4&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited condensed consolidated financial statements for Mama's Creations, Inc., including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, asset breakdowns, liabilities, equity, and recent accounting pronouncements [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at specific dates, detailing assets, liabilities, and stockholders' equity | Metric (in thousands) | July 31, 2025 | January 31, 2025 | | :-------------------- | :------------ | :--------------- | | Total Assets | $51,236 | $47,062 | | Total Liabilities | $21,649 | $22,166 | | Total Stockholders' Equity | $29,587 | $24,896 | | Cash and cash equivalents | $9,384 | $7,150 | | Inventories, net | $6,433 | $4,817 | | Accounts payable and accrued expenses | $11,128 | $12,052 | - Total Assets increased by **$4.174 million (8.87%)** from January 31, 2025, to July 31, 2025, primarily driven by increases in cash and cash equivalents, inventories, and operating lease right-of-use assets[11](index=11&type=chunk) - Total Stockholders' Equity increased by **$4.691 million (18.84%)** from January 31, 2025, to July 31, 2025, mainly due to retained earnings growth and additional paid-in capital[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over specific periods, presenting net sales, gross profit, income from operations, and net income | Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $35,203 | $28,382 | $70,458 | $58,220 | | Gross profit | $8,771 | $6,879 | $17,955 | $14,342 | | Income from operations | $1,700 | $1,612 | $3,278 | $2,385 | | Net income | $1,277 | $1,148 | $2,514 | $1,701 | | Net income per common share – diluted | $0.03 | $0.03 | $0.06 | $0.04 | - Net sales increased by **24.0%** for the three months ended July 31, 2025, and by **21.0%** for the six months ended July 31, 2025, compared to the respective prior periods[14](index=14&type=chunk) - Net income increased by **11.2%** for the three months ended July 31, 2025, and by **47.8%** for the six months ended July 31, 2025, year-over-year[14](index=14&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details the changes in the company's equity accounts over specific periods, including additional paid-in capital and retained earnings | Metric (in thousands) | Balance, February 1, 2025 | Balance, July 31, 2025 | Balance, February 1, 2024 | Balance, July 31, 2024 | | :-------------------- | :------------------------ | :--------------------- | :------------------------ | :--------------------- | | Additional Paid-In Capital | $24,882 | $27,059 | $23,278 | $24,293 | | Retained Earnings | $164 | $2,678 | $(3,547) | $(1,846) | | Total Stockholders' Equity | $24,896 | $29,587 | $19,581 | $22,297 | - Stockholders' Equity increased by **$4.691 million** from February 1, 2025, to July 31, 2025, primarily due to net income of $2.514 million and stock-based compensation[16](index=16&type=chunk)[18](index=18&type=chunk) - Retained earnings significantly increased from **$164 thousand** at February 1, 2025, to **$2.678 million** at July 31, 2025, reflecting the company's profitability[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company across operating, investing, and financing activities over specific periods | Metric (in thousands) | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | $4,334 | $1,234 | | Net Cash Used in Investing Activities | $(1,053) | $(2,740) | | Net Cash Used in Financing Activities | $(1,047) | $(2,128) | | Net Increase (Decrease) in Cash | $2,234 | $(3,634) | | Cash and cash equivalents at end of period | $9,384 | $7,388 | - Net cash provided by operating activities increased significantly to **$4.334 million** for the six months ended July 31, 2025, from $1.234 million in the prior year, indicating improved operational cash generation[22](index=22&type=chunk) - Net cash used in investing activities decreased to **$1.053 million** for the six months ended July 31, 2025, from $2.740 million in the prior year, primarily due to lower purchases of fixed assets[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1 - Nature of Operations and Basis of Presentation](index=13&type=section&id=Note%201%20-%20Nature%20of%20Operations%20and%20Basis%20of%20Presentation) This note describes the company's business, its fiscal year, and the foundational principles used in preparing the financial statements - Mama's Creations, Inc. (formerly MamaMancini's Holdings, Inc.) is a Nevada corporation with a fiscal year-end of January 31, operating as a marketer, manufacturer, and distributor of fresh deli prepared foods[24](index=24&type=chunk)[117](index=117&type=chunk) - The company diversifies its product line with ready-to-heat meals, pasta/rice bowls, bulk deli, and packaged refrigerated protein products, many approved as 'all-natural' by the USDA[25](index=25&type=chunk) - The company completed the acquisition of the remaining **76% interest** in Chef Inspirational Foods, LLC (CIF) on June 28, 2023, for approximately **$3.7 million**, with the final payment of **$1.5 million** in common stock made as of June 30, 2025[27](index=27&type=chunk) [Note 2 - Summary of Significant Accounting Policies](index=13&type=section&id=Note%202%20-%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods applied in the preparation of the condensed consolidated financial statements - The financial statements are prepared in accordance with U.S. GAAP for interim information, with all intercompany accounts and transactions eliminated in consolidation[28](index=28&type=chunk) - Revenue is recognized when performance obligations are satisfied, typically upon product shipment or delivery, with trade incentives and promotions recorded as a reduction to the transaction price[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) Gross Sales and Trade Incentives (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross Sales | $36,003 | $28,704 | $73,507 | $59,102 | | Less: Trade Incentives and Promotions | $800 | $322 | $3,049 | $882 | | Net Sales | $35,203 | $28,382 | $70,458 | $58,220 | - The company adopted ASU 2023-07 (Segment Reporting) during the fiscal year ended January 31, 2025, leading to enhanced segment reporting disclosures without impacting financial results[67](index=67&type=chunk) [Note 3 – Property Plant and Equipment, Net:](index=21&type=section&id=Note%203%20%E2%80%93%20Property%20Plant%20and%20Equipment,%20Net:) This note provides a breakdown of the company's property, plant, and equipment, net of accumulated depreciation Property, Plant and Equipment, Net (in thousands) | Category | July 31, 2025 | January 31, 2025 | | :-------------------- | :------------ | :--------------- | | Machinery and Equipment | $8,747 | $7,982 | | Furniture and Fixtures | $242 | $242 | | Leasehold Improvements | $6,015 | $5,875 | | Less: Accumulated Depreciation | $5,627 | $4,712 | | Total | $9,377 | $9,387 | - Depreciation expense for the six months ended July 31, 2025, was approximately **$1.137 million**, a significant increase from $606 thousand in the prior year, reflecting increased asset base[72](index=72&type=chunk) [Note 4 – Intangible Assets, Net](index=21&type=section&id=Note%204%20%E2%80%93%20Intangible%20Assets,%20Net) This note details the company's intangible assets, including customer relationships and tradenames, along with their amortization Intangible Assets, Net (in thousands) | Category | July 31, 2025 Net Carrying Amount | January 31, 2025 Net Carrying Amount | | :-------------------- | :-------------------------------- | :----------------------------------- | | Customer relationships | $2,685 | $3,436 | | Tradename and trademarks | $0 | $0 | | Total | $2,685 | $3,436 | - Amortization expense for intangible assets was approximately **$751 thousand** for the six months ended July 31, 2025, slightly lower than $768 thousand in the prior year[74](index=74&type=chunk) Estimated Aggregate Amortization Expense (in thousands) | Fiscal Year | Estimated Expense | | :---------- | :---------------- | | 2026 (Remaining) | $762 | | 2027 | $1,464 | | 2028 | $459 | | Total | $2,685 | [Note 5 – Accounts Payable and Accrued Expenses](index=22&type=section&id=Note%205%20%E2%80%93%20Accounts%20Payable%20and%20Accrued%20Expenses) This note presents a detailed breakdown of the company's accounts payable and various accrued expenses Accounts Payable and Accrued Expenses (in thousands) | Category | July 31, 2025 | January 31, 2025 | | :-------------------- | :------------ | :--------------- | | Trade accounts payable | $8,105 | $9,051 | | Accrued promotions | $451 | $485 | | Accrued employee compensation | $1,165 | $1,391 | | Accrued commissions and royalties | $965 | $686 | | Other accrued expenses | $369 | $439 | | Accrued income taxes | $73 | $0 | | Total | $11,128 | $12,052 | - Total accounts payable and accrued expenses decreased by **$924 thousand** from January 31, 2025, to July 31, 2025, primarily due to a reduction in trade accounts payable and accrued employee compensation[76](index=76&type=chunk) [Note 6 – Related Party Transactions](index=22&type=section&id=Note%206%20%E2%80%93%20Related%20Party%20Transactions) This note discloses transactions and balances with parties considered to be related to the company - The outstanding balance of promissory notes to related parties remained at **$750 thousand** as of July 31, 2025, with annual principal payments of $750 thousand due on each anniversary of the December 2021 closing[77](index=77&type=chunk) - Interest expense on related party promissory notes decreased to **$13 thousand** for the six months ended July 31, 2025, from $26 thousand in the prior year, reflecting a lower outstanding balance[77](index=77&type=chunk) - The Company leases a production and distribution facility from a related party, with rent expense of approximately **$168 thousand** for the six months ended July 31, 2025[78](index=78&type=chunk)[79](index=79&type=chunk) [Note 7 – Loan and Security Agreements](index=23&type=section&id=Note%207%20%E2%80%93%20Loan%20and%20Security%20Agreements) This note describes the company's various loan and security agreements, including lines of credit and term notes - The Company has a working capital line of credit with M&T Bank for a maximum of **$5.5 million**, maturing November 30, 2027, with no outstanding balance as of July 31, 2025[80](index=80&type=chunk) - The T&L Note with M&T Bank had an outstanding balance of approximately **$2.0 million** as of July 31, 2025, down from $2.9 million at January 31, 2025, with interest expense decreasing to $87 thousand for the six months ended July 31, 2025[81](index=81&type=chunk) [Note 8 – Concentrations](index=23&type=section&id=Note%208%20%E2%80%93%20Concentrations) This note highlights significant concentrations of revenue and receivables with key customers - For the three months ended July 31, 2025, one customer accounted for approximately **53% of gross revenue**, indicating significant customer concentration[82](index=82&type=chunk) - For the six months ended July 31, 2025, two customers accounted for approximately **44% and 17% of gross revenue**, respectively[82](index=82&type=chunk) - As of July 31, 2025, two customers represented approximately **25% and 19% of total gross outstanding receivables**[83](index=83&type=chunk) [Note 9 – Stockholders' Equity](index=23&type=section&id=Note%209%20%E2%80%93%20Stockholders'%20Equity) This note provides details on the components of stockholders' equity, including restricted stock units and stock-based compensation Restricted Stock Units Activity | Metric | Restricted Stock Units | Weighted Average Grant Date Fair Value | | :-------------------------------- | :--------------------- | :------------------------------------- | | Non-vested RSUs - February 1, 2025 | 367,557 | $2.85 | | Granted | 236,604 | $7.39 | | Vested | (19,175) | $7.32 | | Forfeited | (12,386) | $6.86 | | Outstanding – July 31, 2025 | 572,600 | $4.49 | - Stock-based compensation expense for restricted stock units was approximately **$334 thousand** for the six months ended July 31, 2025, with **$2.2 million** unrecognized compensation remaining[85](index=85&type=chunk) - The Company granted PSUs with a target payout of **94,200 shares** to its CEO during the six months ended July 31, 2025, valued at approximately **$600 thousand**, with related compensation expense of **$130 thousand** recognized[89](index=89&type=chunk)[90](index=90&type=chunk) [Note 10 - Commitments and Contingencies](index=25&type=section&id=Note%2010%20-%20Commitments%20and%20Contingencies) This note outlines the company's contractual commitments and potential contingent liabilities - The Company has a License Agreement requiring a minimum annual royalty payment of **$125,000** to maintain exclusivity, with royalty expenses of **$483 thousand** for the six months ended July 31, 2025[94](index=94&type=chunk)[95](index=95&type=chunk) - The Company entered into purchase commitments for **six million eighty thousand pounds of chicken** (one-year term) and **two million sixteen thousand pounds of beef** (six-month term) at fixed prices[96](index=96&type=chunk) [Note 11 –Leases](index=25&type=section&id=Note%2011%20%E2%80%93Leases) This note details the company's lease arrangements, including right-of-use assets and lease liabilities - Effective February 1, 2025, the Company amended and extended its lease for 25 Branca Road, East Rutherford, NJ, recognizing a right-of-use (ROU) asset and corresponding lease liability of approximately **$4.2 million**[98](index=98&type=chunk) Maturities of Lease Liabilities (in thousands) | Fiscal Year | Finance Leases | Operating Leases | Total Maturities of Lease Liabilities | | :---------- | :------------- | :--------------- | :------------------------------------ | | 2026 remaining | $203 | $735 | $938 | | 2027 | $406 | $1,512 | $1,918 | | 2028 | $398 | $1,591 | $1,989 | | 2029 | $302 | $1,635 | $1,937 | | 2030 | $179 | $1,486 | $1,665 | | Thereafter | $117 | $519 | $636 | | Total undiscounted future lease payments | $1,605 | $7,478 | $9,083 | [Note 12 - Income Tax Provision](index=26&type=section&id=Note%2012%20-%20Income%20Tax%20Provision) This note explains the company's income tax expense, effective tax rates, and deferred tax assets - The Company's effective tax rate for the three and six months ended July 31, 2025, was **22.4% and 20.5%**, respectively, with differences from the statutory rate primarily related to state taxes[101](index=101&type=chunk) - A net deferred tax asset of approximately **$516 thousand** was recognized as of July 31, 2025, an increase from $258 thousand at January 31, 2025, with no valuation allowance[101](index=101&type=chunk)[102](index=102&type=chunk) - The Company is currently assessing the impact of the recently signed One Big Beautiful Bill Act (OBBBA) on its financial statements, which extends key provisions of the 2017 Tax Cuts and Jobs Act[105](index=105&type=chunk) [Note 13 - Segment Information](index=27&type=section&id=Note%2013%20-%20Segment%20Information) This note clarifies that the company operates as a single segment and provides geographical asset information - The Company is managed as a single operating segment, with the Chief Executive Officer reviewing financial information on an aggregate basis for resource allocation and performance assessment[106](index=106&type=chunk) - All of the Company's assets are maintained in the United States[106](index=106&type=chunk) [Note 14 - Subsequent Events](index=28&type=section&id=Note%2014%20-%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date, including new financing and acquisitions - On August 28, 2025, the Company entered into an Amended and Restated Loan and Security Agreement with M&T Bank, establishing a senior secured credit facility including a **$1.9 million term loan**, a **$5.5 million revolving credit facility**, and a **$20 million non-revolving line of credit (PA Line)**[110](index=110&type=chunk) - An initial draw of **$19.0 million** was made on the PA Line on August 28, 2025, to finance the acquisition of Crown I Enterprises Inc. and related expenses[111](index=111&type=chunk) - On September 2, 2025, the Company completed the acquisition of substantially all assets of Crown I Enterprises Inc. for **$17.5 million in cash**, and closed a private placement of **2,666,667 shares of common stock** at **$7.50 per share**, generating **$20.0 million in gross proceeds**[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the company's financial performance and condition, highlighting key operational results, recent acquisitions, liquidity, and capital resources [Overview](index=30&type=section&id=Overview) This section provides a general description of the company's business and strategic objectives - Mama's Creations, Inc. is a leading marketer, manufacturer, and distributor of fresh deli prepared foods, available in over **10,000 stores nationally**[117](index=117&type=chunk) - The company aims to be a one-stop-shop deli solutions platform, leveraging vertical integration and diverse brands to meet evolving consumer demands[117](index=117&type=chunk) [Acquisition of Crown 1 Business](index=30&type=section&id=Acquisition%20of%20Crown%201%20Business) This section details the recent acquisition of Crown I Enterprises Inc. and its expected impact on the company - On September 2, 2025, the Company acquired substantially all assets of Crown I Enterprises Inc., a manufacturer of value-added proteins and ready-to-eat meals, for **$17.5 million in cash**[118](index=118&type=chunk) - The acquisition is expected to be accretive, increase sales, broaden customer reach, and add a USDA-certified production facility with incremental grill capacity and approximately **200 employees**[119](index=119&type=chunk) [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=31&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns readers about the inherent uncertainties and risks associated with forward-looking information presented in the report - The report contains forward-looking statements subject to substantial risks and uncertainties, which could cause actual results to differ materially from projections[122](index=122&type=chunk) - Key risk factors include liquidity adequacy, reliance on limited customers, pricing pressures, economic conditions, competition, regulatory changes, supply chain disruptions, and integration expenses from acquisitions[123](index=123&type=chunk)[124](index=124&type=chunk) [Results of Operations for the Three Months Ended July 31, 2025 and 2024](index=32&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20July%2031,%202025%20and%202024) This section analyzes the company's financial performance for the three-month period, comparing current results to the prior year | Metric (in thousands) | July 31, 2025 | July 31, 2024 | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | | Net sales | $35,203 | $28,382 | 24.0% | | Costs of sales | $26,432 | $21,503 | 23.0% | | Gross Profit | $8,771 | $6,879 | 27.5% | | Operating Expenses | $7,071 | $5,267 | 34.2% | | Net Income | $1,277 | $1,148 | 11.2% | - Net sales increased by **24%** due to volume gains from successful trade and marketing promotions, new product introductions, and new customers[126](index=126&type=chunk) - Gross profit margin improved from **24% to 25%** year-over-year, driven by labor and procurement efficiency and improved fixed overhead absorption, despite higher commodity prices[127](index=127&type=chunk)[128](index=128&type=chunk) - Operating expenses increased by **$1.8 million**, primarily due to higher payroll (**$1.1 million**), advertising (**$305 thousand**), and freight-related expenses (**$206 thousand**)[128](index=128&type=chunk)[130](index=130&type=chunk) [Results of Operations for the Six Months Ended July 31, 2025 and 2024](index=33&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20July%2031,%202025%20and%202024) This section analyzes the company's financial performance for the six-month period, comparing current results to the prior year | Metric (in thousands) | July 31, 2025 | July 31, 2024 | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | | Net Sales | $70,458 | $58,220 | 21.0% | | Costs of Sales | $52,503 | $43,878 | 20.0% | | Gross Profit | $17,955 | $14,342 | 25.2% | | Operating Expenses | $14,677 | $11,957 | 22.7% | | Net Income | $2,514 | $1,701 | 47.8% | - Net sales increased by **21%** to **$70.5 million**, driven by new products, successful promotions, and entry into new customer accounts[132](index=132&type=chunk) - Gross profit margin remained consistent at **25%**, with efficiencies offsetting higher commodity costs and promotional activities[133](index=133&type=chunk)[134](index=134&type=chunk) - Operating expenses increased by **$2.7 million**, primarily due to higher payroll (**$1.6 million**), advertising (**$706 thousand**), and commission/royalty expenses (**$582 thousand**), partially offset by a decrease in professional fees due to a prior-year director settlement[135](index=135&type=chunk)[136](index=136&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to generate and manage cash flow, its financial position, and sources of funding Working Capital (in thousands) | Metric | July 31, 2025 | January 31, 2025 | Change | | :---------------- | :------------ | :--------------- | :----- | | Current Assets | $23,438 | $21,877 | $1,561 | | Current Liabilities | $14,836 | $17,025 | $(2,189) | | Working Capital | $8,602 | $4,852 | $3,750 | - Working capital increased by **$3.75 million** to **$8.6 million** as of July 31, 2025, primarily due to increased cash and inventories, and decreased accounts payable and related party promissory notes[138](index=138&type=chunk) - Net cash provided by operating activities significantly increased to **$4.3 million** for the six months ended July 31, 2025, from $1.2 million in the prior year[139](index=139&type=chunk)[140](index=140&type=chunk) - The Company secured a new credit facility with M&T Bank, including a **$20 million non-revolving line of credit**, and completed a **$20 million private placement of common stock** to finance acquisitions and general corporate purposes[147](index=147&type=chunk)[148](index=148&type=chunk)[150](index=150&type=chunk) [Critical Accounting Estimates and Policies](index=36&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) This section highlights the accounting policies that require significant judgment and estimation by management - There were no significant changes in critical accounting estimates from those discussed in the annual report on Form 10-K for the most recent completed fiscal year[153](index=153&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section outlines the company's exposure to market risks, specifically interest rate risk and commodity price risk, and the strategies employed to manage these exposures [Interest Rate Risk](index=36&type=section&id=Interest%20Rate%20Risk) This section describes the company's exposure to fluctuations in interest rates on its variable-rate debt - The Company is exposed to interest rate risk on its T&L Note and Credit Agreement, which bear variable rates based on SOFR plus a spread[154](index=154&type=chunk) - A **1% change** in the effective interest rate on the T&L Note would result in an approximate **$23 thousand** pre-tax interest expense fluctuation annually[154](index=154&type=chunk) [Commodity Price Risk](index=36&type=section&id=Commodity%20Price%20Risk) This section discusses the company's vulnerability to changes in the prices of raw materials and its mitigation strategies - The Company faces commodity price volatility for raw materials, which are subject to market supply and demand factors[155](index=155&type=chunk) - To mitigate risk, the Company enters into fixed-price purchase commitments for certain commodities, and a **1.0% increase** in commodity prices would negatively impact costs of sales by approximately **$812 thousand** annually[155](index=155&type=chunk) [Item 4. Controls and Procedures.](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures.) This section details the effectiveness of the company's disclosure controls and procedures and outlines the ongoing remediation efforts for previously identified material weaknesses in internal control over financial reporting [Disclosure Controls and Procedures](index=36&type=section&id=Disclosure%20Controls%20and%20Procedures) This section assesses the effectiveness of the company's controls designed to ensure timely and accurate financial reporting - As of July 31, 2025, management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective at a reasonable assurance level[157](index=157&type=chunk) - Disclosure controls are designed to ensure timely recording, processing, summarizing, and reporting of information required under the Securities Exchange Act of 1934[156](index=156&type=chunk) [Remediation of Material Weakness in Internal Control Over Financial Reporting](index=37&type=section&id=Remediation%20of%20Material%20Weakness%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section describes the company's actions to address identified deficiencies in its internal controls over financial reporting - Material weaknesses were identified in internal control over financial reporting related to inadequate segregation of duties, insufficient support for transaction authorization, and inadequate documentation of review procedures[159](index=159&type=chunk) - Remediation actions are being implemented during the fiscal year ending January 31, 2026, including enhancing organizational structure, improving documentary support for transactions, and evaluating personnel roles[161](index=161&type=chunk)[164](index=164&type=chunk) - Management believes these actions will strengthen internal controls and remediate identified material weaknesses by January 31, 2026, though no guarantee is provided[162](index=162&type=chunk) [Changes in Internal Control over Financial Reporting](index=37&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports any material changes in the company's internal control over financial reporting during the period - Except for the remediation efforts described, there were no other changes in internal control over financial reporting during the most recently completed fiscal quarter that materially affected or are reasonably likely to materially affect internal control over financial reporting[163](index=163&type=chunk) [PART II – OTHER INFORMATION](index=38&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings.](index=38&type=section&id=Item%201.%20Legal%20Proceedings.) This section states that the company is not currently involved in any litigation that is expected to have a material effect on its financial condition or results of operations - The Company is not currently involved in any litigation that is believed to have a material effect on its financial condition or results of operations[166](index=166&type=chunk) [Item 1A. Risk Factors.](index=38&type=section&id=Item%201A.%20Risk%20Factors.) This section updates the risk factors, specifically addressing the broad discretion in using private placement proceeds, potential market price decline due to the Crown I acquisition, and significant penalties for failing to register resale of certain common stock shares - Management has broad discretion in using the net proceeds from the Private Placement, which may not yield a favorable return[168](index=168&type=chunk) - The market price of common stock may decline if investors react negatively to the Crown I acquisition, if the acquisition's benefits are not met, or if integration is slower than anticipated[169](index=169&type=chunk)[174](index=174&type=chunk) - The Company faces significant penalties if required registration statements for the resale of common stock from the Private Placement are not timely effective or maintained[169](index=169&type=chunk)[170](index=170&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This section notes that the terms of the Company's T&L Note with M&T Bank restrict the issuance of cash dividends - The Company's T&L Note with M&T Bank restricts the issuance of cash dividends[171](index=171&type=chunk) [Item 3. Defaults Upon Senior Securities.](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) This section states that there are no defaults upon senior securities - There are no defaults upon senior securities[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures.](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the Company[173](index=173&type=chunk) [Item 5. Other Information.](index=39&type=section&id=Item%205.%20Other%20Information.) This section details the Rule 10b5-1 trading plan adopted by the CEO for automatic sale of shares to cover tax obligations related to RSU vesting, and confirms no other such arrangements by directors or executive officers - The CEO, Adam Michaels, entered into a Rule 10b5-1 trading arrangement on June 24, 2024, to automatically sell shares to satisfy withholding obligations upon RSU vesting[175](index=175&type=chunk) - The CEO's trading arrangement was supplemented on July 17, 2025, to include up to **120,620 shares** underlying equity compensation awards received after June 24, 2024[175](index=175&type=chunk) - No other directors or executive officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended July 31, 2025[176](index=176&type=chunk) [Item 6. Exhibits.](index=40&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including various agreements, corporate documents, certifications, and financial statements in iXBRL format - Key exhibits include the Asset Purchase Agreement for Crown I, Amended and Restated Loan and Security Agreement with M&T Bank, and the Securities Purchase Agreement for the Private Placement[178](index=178&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed[178](index=178&type=chunk) - Financial statements and related disclosures are provided in inline eXtensible Business Reporting Language (iXBRL) format[178](index=178&type=chunk) [Signatures](index=42&type=section&id=Signatures) This section contains the official signatures of the Chief Executive Officer and Chief Financial Officer, certifying the report on behalf of Mama's Creations, Inc. - The report is signed by Adam L. Michaels, Chief Executive Officer, and Anthony Gruber, Chief Financial Officer, on September 8, 2025[183](index=183&type=chunk) ```

Core Insights - Mama's Creations, Inc. reported a 24% year-over-year revenue growth for the second quarter of fiscal 2026, reaching $35.2 million compared to $28.4 million in the same quarter of the previous year [2][9] - The company announced the acquisition of Crown 1 Enterprises, which is expected to add approximately $56 million in revenue and enhance operational capabilities [5][6] Financial Performance - Revenue for the second quarter increased to $35.2 million, a 24% increase from $28.4 million in the same quarter of 2024 [2][9] - Gross profit rose by 27.5% to $8.8 million, representing 24.9% of total revenues, compared to $6.9 million or 24.2% in the same quarter of the previous year [10][12] - Operating expenses increased to $7.1 million, up 34.3% from $5.3 million, with operating expenses as a percentage of sales rising to 20.1% from 18.6% [11] - Net income for the quarter was $1.3 million, an 11% increase from $1.1 million, maintaining earnings per share at $0.03 [12] Acquisition Details - The acquisition of Crown 1 was completed for $17.5 million in cash, funded through a $20 million private placement and a $27.4 million long-term credit facility [5][6] - Crown 1 is expected to provide significant operational synergies and cross-selling opportunities, with a goal to improve its gross margin to align with Mama's levels within 12 to 18 months [7][8] Operational Highlights - The company experienced broad-based momentum across its protein offerings, with revenue growth outpacing the category by nearly 10 times [4] - New customer door expansion and targeted pricing actions contributed to maintaining gross margin targets [9] - Cash and cash equivalents increased to $9.4 million as of July 31, 2025, up from $7.2 million as of January 31, 2025, driven by improved profitability [13]

Company Overview - Mama's Creations, Inc. is a leading national marketer and manufacturer of fresh deli prepared foods, found in over 12,000 grocery, mass, club, and convenience stores across the United States [3] - The company aims to become a one-stop-shop deli solutions platform, leveraging vertical integration and a diverse family of brands to meet the changing demands of modern consumers [3] Recent Developments - Management has been invited to attend the Lake Street Best Ideas Growth Conference (BIG9) on September 11, 2025, in New York City, where Chairman & CEO Adam Michaels will host one-on-one meetings with institutional investors [1][2] - The acquisition of Crown I is expected to enhance Mama's production capacity, customer reach, and operational capabilities, creating operational synergies that improve labor, purchasing, and distribution [2] Strategic Vision - The company is focused on delivering more delicious products for consumers, strengthening partnerships with retailers, and providing long-term value for shareholders [2] - The strategic acquisition is aimed at adding a profitable, strategically located facility and a premium retail customer base, which will open new growth channels [2]