Mama’s Creations(US:MAMA)2022-12-13 03:08Financial Data and Key Metrics Changes - Revenue for Q3 2023 increased 137% to a record $25.7 million, compared to $10.9 million in the same year-ago quarter, driven by organic growth and acquisitions [24] - Gross profit rose to $6.6 million or 25.5% of total revenues, up from $2.7 million or 24.4% in the same year-ago quarter, attributed to normalization of commodity costs and strong sales growth [25] - Net income for Q3 2023 totaled $1.1 million or $0.03 per diluted share, compared to breakeven in the same year-ago quarter [27] - Adjusted EBITDA increased to $2.1 million for Q3 2023, up from $0.3 million in the same year-ago quarter [27] - Cash and cash equivalents as of October 30, 2022, were $3.5 million, compared to $0.9 million at January 31, 2022 [27] Business Line Data and Key Metrics Changes - The increase in revenue was driven by organic growth across all divisions, chiefly through cross-selling and inorganic growth from the acquisition of T&L and Olive Branch [24] - Operating expenses totaled $5.1 million in Q3 2023, compared to $2.7 million in the same year-ago quarter, with operating expenses as a percentage of sales decreasing to 19.7% from 24.4% [26] Market Data and Key Metrics Changes - The company is addressing the $30 billion-plus food service and prepared foods market, focusing on quick, clean, and fresh meals [11] - Retailers are facing significant supply chain and labor challenges, seeking reliable solutions for their hot bar, deli, and grab-and-go offerings [12] Company Strategy and Development Direction - The company aims to become a one-stop-shop for prepared foods, leveraging consumer-driven innovation and strategic acquisitions to fill gaps in its portfolio [11] - The immediate focus is on continuous improvement of cost, controls, and culture, with new approaches to cost management and operational efficiencies being implemented [14][16] - The company is evaluating a corporate name change to better reflect its platform model [22] Management's Comments on Operating Environment and Future Outlook - Management believes the company is well-positioned to navigate recessionary pressures and commodity inflation, focusing on high-quality, easy-to-prepare, and affordable meal solutions [13][21] - The company anticipates a sustainable return to profitability and a healthy trajectory moving into Calendar Year '23 and beyond [19][21] Other Important Information - The company has seen strong organic growth and growth from recent acquisitions, achieving a $100 million annualized sales run rate a quarter earlier than expected [19] - The company is actively working on improving its logistics and procurement efficiencies through synergies created by acquisitions [26][30] Q&A Session Summary Question: Congratulations on the quarter, how have employees evolved in productivity and feedback? - Management noted that winning helps inspire the team, leading to increased productivity and better customer service [41] Question: Are there plans to expand into the Midwest and West? - Management confirmed that the company is national today and has begun selling products to a major West Coast customer [44] Question: How is the company managing G&A expenses as revenue grows? - Management expressed confidence that growing top-line revenue will allow for investment in capabilities without increasing G&A as a percentage [48][49] Question: How are initial tests for Meatballs in a Cup going? - Management reported positive results from tests and is intentionally rolling out products based on customer feedback [50][51] Question: Can sequential growth in earnings be expected for Q4? - Management indicated that while Q4 is historically softer, they feel good about achieving their goals and maintaining margins [58][60]