Mama's Creations, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to MAMAS Creation's third quarter fiscal 2024 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, December 12, 2023, and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is MAMAS Creations Chairman and CEO Adam L. Michaels and CFO Anthony Gruber. Before we get started, I'll read a disclaimer about forward-looking statements. This conference call may contain, in addition to historical information, forward-looking statements within the meaning of federal securities laws regarding MAMAS Creations. Forward-looking statements include, but are not limited to, statements that express the company's intentions beliefs, expectations, strategies, predictions, or any other statements relating to its future earnings, activities, events, or conditions. These statements are based on current expectations, estimates, and projections about the company's business base in part on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Actual outcomes and results may and are likely to differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors discussed from time to time in this report and in other documents which the company files with the U.S. Securities and Exchange Commission. In addition, such statements could be affected by risks and uncertainties related to factors beyond the company's control. Matters that may cause actual results to differ materially from those in the forward-looking statements include, among other factors, the loss of key management personnel, availability of capital, and any major litigation regarding the company. In addition, throughout today's call, the company may refer to adjusted EBITDA, a non-GAAP financial measure, which it believes better reflects the performance of the business on an ongoing basis. A reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure is included in today's earnings release, which is available on the MAMAS Creations website under the Investors tab. And finally, this conference call contains time-sensitive information that reflects management's best analysis only as of the date and time of this conference call. The company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information, or circumstances that arise after the date of this conference call. At this time, I'd like to turn the call over to Chairman and CEO Adam L. Michaels. Adam, the floor is yours.

Thank you, operator, and thank you to everyone for joining us today. I'd like to welcome you to our third quarter fiscal 24 financial results conference call. I'm very excited to be speaking with you all today, coming out of what was another strong quarter of consistently improving top and bottom line growth, representing even more evidence of what we believe is MAMA's true potential over the long term. We continued our reliable cadence of operational execution in the third quarter with strong double-digit revenue growth and the year-over-year expansion of our gross margin profile by 460 basis points to 30.1%, validating our strategy and internal focus on our three Cs, cost, controls, and culture. Both revenue and net income were up over 15% consecutively from the second quarter of fiscal 24, and we are now beginning to see the cumulative results from our efforts over the last year, ranging from our acquisition of CIF to formalizing and improving countless processes throughout the company. Taken together, I believe we remain on track to continue our cadence of planned, persistent, and profitable growth in the years to come. Our team has worked together to drive a significant turnaround in the business in the last year, changing everything but, no, including the name. We made countless small changes at every level of the company, to logistics to administration, implementing operational KPIs under the mantra of what gets measured gets improved. The results can be clearly seen in our gross margin profile, which improved from 11.9% in Q2 fiscal 23 to 30.1% today, as well as in our bottom line with our net income transforming from negative $700,000 in Q2 fiscal 23 to over $2 million today. Looking ahead into the next fiscal year, we see even more opportunities to further margin enhancement, particularly by leveraging strategic CapEx investments to build new in-house capabilities earlier in the value chain, improving automation at our production facilities and further building the capacity to support potential new tier one national customers. Taken together, These initiatives will position us to invest surplus gross margin into higher and more profitable trade promotion, which will serve as the rocket fuel for the next leg in our revenue growth trajectory. Early tests in trade promotion have driven promising results, and we look forward to right-sizing our trade promotion investments in the quarters to come. At its core, our strategy and growth are being fueled by macro trends that continue to point in our favor. We are well positioned to capture share driven by the rapid shift in consumer preference towards deli prepared foods, which as a sector continue to grow in both price and volume. With the effects of the pandemic normalizing, food retailers are now investing heavily to increase space for the fresh prepared grab and go options to differentiate themselves and appeal to the next generation of shoppers. capturing share from restaurants with healthy, high-quality meals and creative new flavors at a favorable price point relative to takeout. Research from the Food Marketing Institute, FMI, reports Gen Zers and Millennials consume grocery deli-prepared foods more often, and both report they expect to increase food service purchases in the future. More than half of shoppers recently surveyed say grocery deli prepared foods represent a good value compared to eating out at a quick service or fast casual restaurant or ordering takeout. Grocers have noticed this undeniable macro trend with 64% of grocery executives polled by Deloitte saying that the fresh department is the most strategically important area for their sales growth during the next 12 to 36 months. with FMI reporting that three-quarters of food retailers are planning to increase the space they allocate to food service. In-home dining has become a source of respite for consumers seeking to avoid the ever-present impacts of inflation, with trailing 12-month in-home food inflation running at 2.1%, as compared to more than double that at 5.4% for out-of-home occasions. all on top of what has already been aggressive inflation since COVID began. We firmly believe prepared foods will continue to grow and take market share from the frozen, center aisle, and especially out-of-home occasions, creating a generational opportunity for deli prepared foods providers such as Mama's Creations. As I've said before, realizing our goal of shaping Mama's Creations into a one-stop shop for deli prepared foods has required a step change in our corporate structure in many ways. Throughout the third quarter, we remain laser focused on the continuous foundational improvement of our three C's strategy, cost, controls, and culture. Starting with cost, as is plainly visible in our margin profile, our new approach to cost management has driven noticeable savings across the organization. which has enabled our gross margin to grow from 12% when I started to the 30% range as you saw today. Our new ability to load share and produce leading products across our two facilities, rather than having them each single source, has established the framework to enable a much greater level of flexibility and agility that will ultimately provide us with both redundancy in production and lower costs. In addition, Our significant investments in automation will position us to grow production capacity to support anticipated future Tier 1 customer wins, as well as to notably enhance margins, which ultimately positions us to reinvest those gains in trade promotion, the rocket fuel for our growth. We are already harvesting the fruits, or shall I say proteins, of our labor. For example, Our gross margins saw an over 300 basis point improvement year over year through significant procurement efficiencies. A further nearly 200 basis points through labor efficiencies as load sharing between facilities helped to drive reduced overtime. While most other companies would be ecstatic for such results, our team only sees it as justification to double down on our 3C strategy to capture more savings for us to reinvest. On the controls front, I'm proud to say that we delivered on time, in full, with the transitioning of our T&L Creative Sales division over to our NetSuite ERP system. This means that our full company is now on the NetSuite platform, providing us with a vastly improved degree of actionable insights into the details of our operations. While not as sexy, we also implemented our new SEC reporting systems, Workiva, which automates processing, allows us to close our books faster, and frees up our finance team to focus on more value-added activities. Having our financial, operational, and sales analytics at the touch of a button is truly transformational, something we saw after integrating NetSuite at Mama Mancini's and Olive Branch. As I've said before, what gets measured gets improved. We have proven it together over the past several quarters and these analytical capabilities that we are investing in in-house will continue to pay dividends for years to come. Another form of proof of our strategy comes from the response of our customers to our products. We recently heard from our QVC customers who once again voted Mama Mancini's products as number one in the I could eat this every day, best sauce, and best smart swap categories during the recent 2023 QVC Customer Choice Food Awards. It is truly an honor to receive this level of recognition for the fifth year in a row, beating out countless superb food products offered on QVC, a testament to the joy of our products continued to bring to our QVC loyal consumers. QVC continues to be a tremendous, profitable, and incremental channel for us. which also serves as an efficient R&D and innovation real-time testing platform. Finally, and most importantly, I am proudest of the cultural evolution my teammates and I are creating. This quarter, we launched our first ever employee engagement survey with an impressive 80% participation rate. I've seen early results with our amazing VP of HR, Abby Meeks, And she is already sharing with our leadership team the three specific actions we are going to commit to for our people. Abby also helped us implement our first ever performance management system. I was lucky enough to have a mentor early in my career, John Katzenbach, and he taught me that you can't change a culture. You change behaviors. And behavioral change leads to cultural change. I am living that with my 250 colleagues every day at Mamas. And I couldn't be more excited for the renewed culture we are building together. We continue to invest in our people to further grow capabilities. And while not every hire gets a press release, we had several exciting appointments recently. Concurrent with the retirement of COO Matt Brown at the end of fiscal third quarter, we announced the planned evolution of our leadership team with two new vice president of operation appointments. Eric Felice was promoted to the role of Vice President of Operations, East Rutherford. Eric maintains over 25 years of operational experience, including over 10 years managing operations at our facility in East Rutherford, New Jersey. In addition, Ray Gere was promoted to the role of Vice President of Operations, Farmingdale. Ray draws on over 30 years of operations experience, including nearly 10 years managing operations at our facility in Farmingdale, New York. I am fully confident that these tested leaders now managing operations, further supported by the superbly talented T&L Creative Salads founder, Anthony Morello, and our tenured chief administrative officer, Steve Burns, that we are well positioned to continue to realize exciting new operational synergies between our new facilities. I want to share our congratulations to Eric and Ray and thank Anthony and Steve for their continued leadership. With a successful evolution of our finance and operations organization, I committed to my fellow shareholders that building our sales and marketing organization would be our next area of focus. I am proud to report that we again are successfully building differentiated capabilities ahead of schedule. We have nearly completed the build out of our sales organization, growing from a single dedicated sales employee to five today. Further supported by our chief marketing officer, and head of trade strategy and execution. Together, their goal is to continue to drive up our average items carried, accelerate our existing velocities, and open new doors, building broad-based distribution. With our new team and capabilities, we increase the likelihood of opening up entirely new channels, whether that is the convenience channel, e-commerce channel, our major mass retailers such as Walmart or Target, Opening these will be impactful to our growth trajectory, hence our strategic CapEx investments to prepare for whatever the future may hold. In summary, I firmly believe that we are well-positioned to leverage the build-out of our supercharged sales team and a compelling product portfolio to take market share, continue to grow our SKUs per customer, and ultimately become the premier one-stop shop deli solution provider in the United States. As we continue to improve our internal processes firm-wide to become brilliant at the basics, we are building a more resilient and flexible organization that I believe can deliver sustainable value to our fellow shareholders for years to come. With that, I'd like to turn the call over to Anthony Gruber, our Chief Financial Officer, to walk through some key financial details for the third quarter of fiscal 24. Anthony?

Thank you, Adam. Revenue for the third quarter of fiscal 2024 increased 11.5 percent, 28.7 million, as compared to 25.7 million in the same year-ago quarter. The increase was largely attributable to volume gains driven by same-customer cross-selling, the acquisition of new customers, and successful pricing actions. Gross profit increased 31.6 percent to 8.6 million or 30.1% of total revenues in the third quarter of fiscal 2024, as compared to 6.6 million, or 25.5% of total revenues in the same year-ago quarter. The increase in gross margin was primarily attributable to successful pricing actions, the normalization of commodity costs, and improvements in procurement, manufacturing, and logistics efficiencies. Operating expenses totaled $5.9 million in the third quarter of fiscal 2024 as compared to $5.1 million in the same year-ago quarter. As a percentage of sales, operating expenses increased in the third quarter of fiscal 2024 to 20.7% from 19.7%. Operating expenses as a percentage of sales increased due to the addition of several new key hires. brought new and differentiated capabilities to the organization. This figure includes a tripling of our marketing expenditures this quarter as we achieve many firsts for the company and build out a best-in-class marketing program. Net income for the third quarter fiscal 2024 increased 83% to $2 million or $0.05 per diluted share as compared to a net income of 1.1 million, or 3 cents per diluted share in the same year-ago quarter. This quarter's net income totaled 7% of revenue, in line with management expectations in the mid-single-digit range. Adjusted EBITDA, a non-GAAP term, increased 67.6% to 3.5 million for the third quarter of fiscal 2024. compared to an adjusted EBITDA of $2.1 million in the same year-ago quarter. Cash and cash equivalents as of October 31, 2023 were $5.6 million as compared to $4.4 million as of January 31, 2023. The increase in cash and cash equivalents was driven by $1.5 million in cash flow from operations in the third quarter of fiscal 2021. 1 million of which was used to pay down the company's debt. As of October 31st, 2023, total debt stood just under $10 million. Looking ahead, we believe that our normalized gross margin profile will continue to hover in the high 20% range. Our long-term goal, leveraging strategic CapEx investments, procurement efficiencies, and continuous operational efficiencies, would be targeting margins consistently maintained in the low 30% range while right-sizing our trade promotion investments. One fact that I'd like to call out that we are quite proud of is that top of the, on top of the 460 basis point improvement in gross margins, we still were able to double our trade investment in the quarter. Turning to net income, while we continue to target mid-single digit net income margins, Our long-term goal would be to improve to approximately 10% with adjusted EBITDA margins in the team's percentage range. This completes my prepared comments. Now, before we begin for our question and answer session, I'd like to turn the call back to Adam for some closing remarks. Adam?

Thank you, Anthony. Our ambition is to fortify and expand upon the robust groundwork and strategy presented here today. positioning us to continue to drive profitable growth and margin expansion. We will seek to reinvest our surplus gross margins as rocket fuel for our trade promotion budget, which we expect will ultimately snowball into increasingly robust revenue growth. Looking ahead, our near-term sales goals will be achieved by launching highly incremental products to further increase the SKUs per customer, introducing our products to new tier one customers via our supercharged sales team, putting in place high ROI trade promotion programs to accelerate existing product velocities, and further enhancing our margin through continuous operational improvements at every level of the organization. We believe that this approach will not only position Mama's Creations as a one-stop shop deli solution provider, but drive sustainable shareholder value creation

over the long term with that i'll turn it over to the operator to begin our question and answer session operator thank you sir we will now begin the question and answer session for telephone participants if you have a question please press the star followed by the one on your touchtone phone if you would like to withdraw your question please press the star followed by the two again that is the star followed by the one if you have a question If you are using speaker equipment, you will need to lift the handset before making your selection.

I'll now pause as we assemble a queue. Thank you.

Our first question comes from the line of Ryan Myers with Lake Street Capital. Please proceed with your question.

Hey, guys. Thanks for taking my questions. Congrats on another solid quarter. Obviously, it looks like we saw sequential revenue growth once again, along with sequential EBITDA growth. Just wondering if you can comment on how we should be thinking about Q4 and what sort of seasonality we should be expecting.

Yeah, thanks, Ryan. Great team effort. Yeah, I think like we spoke about last year and before, Q4 is usually our softest quarter. So think, you know, not many people are shopping on Thanksgiving Day and Christmas Day, and hopefully people get to take some vacation. So we do know, like you saw last year, it tends to be a little softer. I think we're still, you know, shooting for, we said, you know, we're going to continue to grow faster than the market and continue to gain share. We're seeing that in the high single digits now between all of that, and we think we could continue to beat that.

Got it. That's helpful. And then just wondering if you can comment a little bit more on the new sales hire, you know, what kind of productivity have you seen out of them? And then maybe if you can quantify how much new business they generated during the quarter. And then if you have any sort of comments on how much business you think they can generate next year, whether it's in terms of new customers or just overall revenue growth, it'd be helpful to understand.

No, it's actually incredible, Ryan. I wish everybody on this call could have joined me. So last week we had our sales meeting, our entire sales team and the extended team got together to plan out next year and to talk about customers. It was, yes, you're going to ask the questions about the numbers, and I'm totally great with that, and I'll answer that. But it's the culture, the energy that you've never had before. Literally when I started, we had one salesperson. Uh, so that was, was great. And to see that excitement, you know, from what's going to happen, everything's going to happen. So brought in this great guy, Art, who has lived his whole life in the C-Store. We have a whopping total of $0 in the C-Store. We're going to open that up next year. Uh, Andrew with e-commerce, uh, the work that Lauren Sella is overseeing and all of our marketing efforts. These are real capabilities that we've never had before at a company that And I expect to see significant growth next year. Again, I continue to believe we're going to market is and continue to grow share. These folks are going to help us do that more confidently and at a higher rate than would have without them. So new customers, new channels are going to be incredible. And again, Nick, who's leading all of our trade programming, We didn't have those capabilities before. The level of analysis we're doing now on ROIs on every single program we're doing is unheard of in this company beforehand. So we know exactly what we're doing. We know what to do more of. And equally, because you're not going to get it all right. If you get it all right, you're not trying hard enough. We know which ones aren't going to work and why we're not going to double down on them next year. So it's been perfect. It has actually exceeded my expectations this whole sales team coming together and I love it.

That's great to hear. And then last question for me, I know average SKU per customer was seven last quarter. Did that trend higher during the quarter and what is that currently standing at?

Yeah, it's good. So a year ago this time it was at six. We actually got it up to, it's a little over seven now. So what's happening is we're seeing new customers come in, you know, when new customers come in, remember this is a weighted average. So when a new customer comes in, and like we said, they usually come in with just a couple SKUs, ironically, that suppresses the average items carried. And even we overcame that and still got over seven for that. The other thing is some of the customers that did really well this quarter tended to have fewer items because they had much more volume to it. But we continue to make progress. We did better than we did before, and I expect to do even more with our new sales team.

That's helpful. Thanks for taking my questions. Thanks, Ryan.

Thank you.

Our next question comes from the line of Eric Deloria with Craig Hallam. Please proceed with your question.

Great. Thank you for taking my questions, and congrats on another really impressive quarter here. My first question is a bit of a follow-up to the last question. So, you know, we've seen year over year revenue growth accelerate from 5.9% in Q1 to now 11.5% in Q3. I was wondering if you could just help us understand the drivers of that acceleration. You know, obviously there's a number of things going on here. Presumably increasing SKUs per store is having the biggest impact there. But if you could just kind of You know, help flesh that out a bit. You know, are there any sort of velocity changes or new geographies to call out in addition to the increasing SKUs per store? Thanks.

Yeah, absolutely. So a couple things. So first, what's great is both of our major businesses, right, the legacy Mancini business and the new Creative Salads business, both of them grew double digits, which was great. So this is a – we're all rowing the boat together. That was great to see. Actually, a super majority of the growth was volume-driven, which is awesome. So I was really happy to see that. So this is actual real sales. This is not a pricing thing, even though we were able to improve our gross margins in price. So we saw that as well. We did get to see great new customers that brought in, one that I'm really excited about that I'm sure you guys know, Albertson's. We just opened up a whole new division in North Cal, which is one of their biggest divisions, with some of our chicken products. Again, this is something that I love to see. So we had Albertsons. Albertsons has been our customer for a while on the legacy Mancini side. What I told you guys is we have customers. Now let's leverage all these creative salads products, all the chicken or the paninis that We got this great with Damoulas now, getting in, again, a legacy customer. We now have Paninis. They're literally flying off the shelf. It's incredible. Caboos, holiday markets. So a lot of new customers, exactly to your point. And then, you know, we just spoke about AIC, getting more items into the stores. And I think one thing that's been great, and I mentioned earlier the work that Lauren Sella is doing as our chief marketing officer, we've been testing, right? Test, learn, test. testing a number of programs uh this past quarter they're seeing very promising results it's the marketing that is going to help us from a velocity standpoint if you're in the actually if you're anywhere on the the east coast i don't know if you guys know z100 elvis duran in the morning show i think it's one of the most popular morning shows on the east coast uh lauren did a program with them uh actually dan mancini the two of them went to uh the studios, and they don't stop talking about it. They don't stop talking about the meatballs. So that is really starting to help move and get momentum. People are talking about it, and that's helping with velocities. So I really would tell you it's the trifecta. I share with you new customers. I share with you strength in average items carried. And now with the marketing, driving velocities. So I think it's all three working together. And this is healthy growth again. This is volume-driven growth. in both of our major businesses.

That's great to hear. I appreciate that color. It sounds like everything's moving in the right direction here. My next question is on the margin impact from CIF. If I look back, it looks like that was sort of expected to have 100 to 200 basis point potential gross margin. you know, improvement here. And I'm just wondering how to sort of combine that information with your sort of, you know, target to keep gross margins ideally in the high 20s and sort of reinvest in trade promotion. Is this one to two percentage points incremental to that high 20s? Or is this now, you know, we're staying at high 20s and now we essentially have, you know, another 100 to 200 basis points of surplus margin to reinvest?

Yeah, so first I need to apologize for over-delivering on the high 20s. I'm sorry about that. But I'll keep disappointing. I think that there's two or three things. So I think the first thing is the CIF acquisition has been tremendous. Ron Loeb, Jeff Siegel, the whole team, I could go through everybody, has just done an amazing job, and we're one team now. We don't even talk about CIF anymore. We're one team. The second thing is, yes, we absolutely see the one, like we said, the one to two points. Again, we have over-delivered our thesis on what I brought to the board on the opportunity. So I feel great about saying that. The third, I think, is even more important than numbers. The talent that we brought in, the folks, so there are folks from CIF that had capabilities that we didn't have before. Rebecca and our freight. I've mentioned to you freight. When we first started, 200 basis points, 280. As crazy as numbers are, we got another 50 basis points of improvement this quarter. That's real capabilities that Rebecca brought to the team. What we're able to do in accounts receivables, it is, yes, it's great that the CIF acquisition got us more sales and got us more margin, but the real secret is it got us great talent and real capabilities in our business.

And that's what I'm proudest of. That's great to hear.

Um, my last couple of questions, I guess, um, I guess first is just a clarifying question. Um, did you say earlier, I think it was on the previous, um, uh, question, um, that you had hired a, uh, sort of a new head of the C-Store channel. I just wanted to clarify that first.

We did. Yeah.

Yep. Uh,

Art is just killing it. He's only been here a month or two and already connecting with the right brokers, the right distributors, the energy that he brought to the meeting. He actually pushed me. He was yelling at me that I was calling the number too conservatively. How's that? It was like his first week here and he's already calling me out, which I love. We have a new guy that's running C-Stores, e-commerce now. We are building the team that's going to win.

Yeah. So you have this new C-Store hire. You press released a sort of launch of direct-to-consumer e-commerce. I think you called out sort of the club opportunity in the press release and then mentioned mass market in your prepared remarks here. Just kind of help us frame these opportunities here. I think you said C-Store could even drive near-term results here. How should we think about these I guess one, just in terms of potential scale relative to the size of your traditional grocery channel, and then perhaps in terms of whether it's priority or just when we might be able to see some potential results here. I'm just trying to understand these opportunities as they come up.

Thank you. Yeah, look, I think Art puts enough pressure on himself, as does everyone on the team. We're not looking – so, yes, for our fiscal 25 plan, we built a bottom-up model. Obviously, we won't be sharing that bottoms-up customer by customer model, but we have it. Let's put this into perspective. We're pretty much not in five of the top ten customers. The three biggest customers in this country, Target, Walmart, and Banner Kroger, we're not in. So I think that should put in perspective for us the level of distribution. And, you know, again, I'm proud with over 8,000 points of distribution, very proud of that. Over $100 million business, that's wonderful. We're in, like, still probably, I don't even think we're in the bottom of the first. We're probably in, like, you know, maybe we have one out in the top of the first. That's how early we are in the process. So I think there's tremendous value. But, again, we're not going to rush. I'm here for the long haul. Anthony's here for the long haul. And we're going to do things, you know, very organized. We're going to do it very profitably. So that, you know, look at the growth that we're having and the profits are just getting better. The business is getting healthier and healthier. I think if you'd look at our peers or in my old world at Mondelez, all the companies that I would look at to acquire, yeah, it's super easy to get growth. I mean, we're losing $100 billion, but don't worry about it. Someone else will pay for it. We are growing smartly, we're growing profitably, and we're accelerating our profit. That's the type of growth that you're going to see from this business.

Well, it's certainly very impressive what you've all been able to do over the past year or so, and certainly looking forward to as many opportunities to come.

Thanks again for taking my questions. Thanks a lot, Eric.

Thank you.

Our next question comes from the line of Howard Halpern with Taglage Brothers. Please proceed with your question.

Congratulations, guys. Another great quarter. Thanks, Howard. Scanning the queue that's out there, I saw, could you describe what was the primary driver with growth in the Midwest year over year and sequentially? Because it seems like it was a nice bump in the quarter.

Yeah, no, it was great. And you're probably the only CEO that's happy to see that growth You know, we're losing share on the East Coast because we're doing so much better on the Midwest and the West Coast. That was primarily two or three things. One, Costco continues to get stronger and stronger for us. And I spoke about this earlier around this trifecta. So first, this year, we got the largest order ever. It's actually shipping now in the Northeast, over a million dollar order. Two, we've had multiple rotations now in some regions. We've already been this year already, Northeast, Midwest, Pacific Northwest, LA region. I'm sure I'm missing others. And then the third, and I'm super excited, we're producing it now. You'll see it next month if you're out in the West Coast. We got our sausage and peppers into the LA region of Costco today. which is wonderful. So this is the first time ever we've had a non-meatball product in Costco. So we hit the triple threat this year, which was awesome. Directly to your question, Costco, we had another rotation in the Midwest, and then also Midwest sales. Roundy's, I believe, is also in the Midwest, and we continue to do well at Roundy's, which is, if you guys know, a Kroger banner. Underneath the Kroger banner is Roundy's. So those are the answers, Howard.

Okay. And what are you seeing in terms of, you know, how you talk about the grocery stores building out this part of their store? Is there an opportunity for the, you know, the bowl and a cup to go in that section of grocery stores going forward?

Well, you must be speaking to Scott Schaefer on our sales team. So Actually, it's great that you mentioned that. So Juul is in Albertson's banner. Juul is crushing it with our Meatballs in a Cup. So just as a reminder, we developed Meatballs in a Cup as a series. Boxing everybody out so he gets all of the production. But we actually, Scott, we actually sold in to Juul. I shared with the leadership team the other day. We actually got an end cap, so a refrigerated end cap, which is really hard to get. And they had both our beef meatballs and our turkey meatballs on that end cap. So, yes, Howard, directly to your point, while the intention was to have the cups in C-Store only, really, they're actually starting to do well in the grocery space with Juul and with others. And then also there's a lot of interest from the club channel for a multi-pack, which we're investigating as well. So it's happening. Howard. It's great.

And all that eventually too could lead to increased volumes on the, uh, e-commerce side.

Yup. We got to get actually Lauren, see that now that Lauren must've, uh, been happy now too. So yes, if you go onto our website, shop.mymancini.com, you could actually get our, uh, meatballs in a cup on our website. So yes, it should help drive e-commerce sales as well.

Okay. And just, uh, SG&A question. Are we now at the new level? Is this sufficient to help fuel that double-digit growth that you hopefully will achieve over the next few years?

Yeah, you know what? Let's see. I don't want – and I say this respectfully with sitting next to Anthony, my CFO – I don't want necessarily Anthony to be driving what capabilities we need. Obviously, we're going to manage the business well, and we're going to grow, and we're going to maintain our profitability. But I want to bring in great talent, and I'm never going to – I don't make decisions. We as a leadership team make the decisions on who to bring in. But I want to bring the capabilities in. That said, we had a great year this year. You see the talent we brought in from sales and marketing and logistics. I think we're down to maybe one or two more people that could really accelerate our business. So I think we're mostly there, but I want to bring in the right talent. I want to also have the right amount of marketing. You know, Howard, well, that marketing is a below-the-line number. That means it's going to sort of, quote-unquote, hurt OpEx. I want to do what's right for this company, and I don't want to let – short-term thinking influence our long-term aspirations. We're going to be a billion-dollar company, and we need the marketing to do that. But I promise you, I'm a big talker, but I get scared faster than you guys do. So I will make sure that we continue to stay profitable and continue to grow.

Okay. Well, thanks, and keep up the great work.

Thanks so much, Howard.

Thank you.

This concludes our question and answer session, and I will now turn the call back to Chairman and CEO Adam L. Michaels for his closing remarks.

Thank you, Operator, and thank you again to each of you for joining us on today's earnings conference call. We look forward to continuing to update you on our progress as we strive to deliver value to my fellow shareholders and execute upon our vision of becoming a national one-stop shop deli solution provider.

Thank you.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.