Mama’s Creations(US:MAMA)2021-12-15 03:49Financial Data and Key Metrics Changes - Revenue for Q3 2022 increased by 12.1% to $10.9 million compared to $9.7 million in the same quarter last year [21] - Gross profit totaled $2.7 million, representing 25.2% of total revenues, down from $2.9 million or 30.1% in the same quarter last year, attributed to higher costs of protein and freight [22] - Operating expenses rose to $2.7 million from $2.1 million in the same year-ago quarter, with operating expenses as a percentage of sales increasing to 25.1% from 21.9% [23] - Net loss for Q3 2022 was $0 million, compared to a net income of $0.7 million in the same year-ago quarter [25] - Cash and cash equivalents increased to $4.5 million from $1.8 million in the same year-ago quarter, benefiting from increased cash flow from operations [26] Business Line Data and Key Metrics Changes - The company is focusing on acquisitions of companies with complementary products in the supermarket perimeter, aiming to enhance distribution and sales [10][11] - A new line of ready-to-eat meals is set to launch, with expectations of significant sales growth due to labor shortages in retail [13] - The introduction of the Meatball-in-a-Cup product is anticipated to cater to convenience stores and food service opportunities [14] Market Data and Key Metrics Changes - The company has established new distribution relationships, including a direct-to-consumer sales channel through Amazon Fresh [15] - Marketing efforts have included social media campaigns and QVC promotions, with significant engagement and sales expected from these channels [16][17] Company Strategy and Development Direction - The company aims to approach $100 million in annual sales within 18 months, establishing itself as a national platform [12] - There is a strong focus on vertical integration through acquisitions that align with core competencies and plant capabilities [32] - The company is preparing for margin expansion by year-end as several margin improvement initiatives are implemented [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory and operational scaling, with expectations for continued success in fiscal 2023 [33] - The company anticipates improvements in gross margins as commodity prices normalize and production volumes increase [22] Other Important Information - The company has made significant operational improvements, including hiring a new Director of Operations and upgrading machinery to enhance efficiency [28] - The company is now live on Oracle's NetSuite ERP system, which is expected to improve operational capabilities [31] Q&A Session Summary Question: What is the expected lag time for gross margin improvement? - Management indicated that most price increases will occur between January 1 and mid to late January, with expectations for margin recovery in the near term [35] Question: Can you provide an update on the acquisition pipeline? - The company is focusing on geographically close acquisitions that can enhance their product offerings and distribution capabilities [38] Question: Are there any issues with employee recruitment? - Management reported no significant issues in finding employees, citing a good work environment and a strong reputation in the community [43] Question: When can we expect the acquisition announcement? - Management stated that they are very far along in the acquisition process and expect to finalize details soon [50] Question: What is the forecast for profitability in the fourth quarter? - Management believes they will achieve profitability in the fourth quarter, although it is still early in the period [69]