Mama’s Creations(US:MAMA)2025-12-08 21:08Financial Performance - Net sales increased by approximately 50% to $47.3 million for the three months ended October 31, 2025, compared to $31.5 million for the same period in 2024, primarily due to the acquisition of Crown 1, which contributed approximately $10.0 million in net sales[129] - For the nine months ended October 31, 2025, net sales increased by approximately 31% to $117.7 million from $89.7 million in the same period in 2024, with the Crown 1 acquisition contributing approximately $10.0 million[135] - The company reported net income of approximately $3.1 million for the nine months ended October 31, 2025, compared to $2.1 million for the same period in 2024[134] Cost and Expenses - Costs of sales rose by approximately 48% to $36.1 million, or 76% of net sales, during the three months ended October 31, 2025, compared to $24.4 million, or 77% of net sales, in the prior year[130] - Operating expenses increased by approximately $6.5 million for the nine months ended October 31, 2025, primarily due to payroll, professional fees, and advertising expenses[139] - Gross profit margin improved to 24% for the three months ended October 31, 2025, compared to 23% for the same period in 2024, driven by operational efficiencies[131] Cash Flow and Working Capital - Net cash provided by operating activities for the nine months ended October 31, 2025, was approximately $8.2 million, up from $6.0 million in the same period in 2024[143] - Net cash used in investing activities for the nine months ended October 31, 2025, was approximately $18.7 million, primarily for the purchase of Crown 1 and fixed assets[145] - Net cash provided by financing activities for the nine months ended October 31, 2025, was approximately $21.5 million, consisting of net proceeds from the sale of common stock and proceeds from the Crown Note[147] - Working capital increased to approximately $18.8 million as of October 31, 2025, compared to $4.9 million as of January 31, 2025, primarily due to an increase in cash and cash equivalents[141] Debt and Financing - As of October 31, 2025, the company had approximately $5.9 million outstanding under its Term Loan Agreement with M&T Bank, with a maturity date of October 1, 2030[149] - The outstanding balance of the T&L Note was approximately $0 as of October 31, 2025, compared to $2.9 million as of January 31, 2025[154] - The company believes its cash resources will be sufficient to meet cash requirements for at least the next twelve months, but may require additional funding for growth or strategic objectives[150] Sensitivity Analysis - A 1% change in the effective interest rate applied to the T&L Note would result in a pre-tax interest expense fluctuation of approximately $59 thousand on an annualized basis[154] - A 1.0% increase in commodity prices would negatively impact costs of sales by approximately $945 thousand on an annualized basis[156]