Mama's Creations, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to MAMAS Creation's first quarter fiscal 2027 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, June 8th, 2026, 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'd like to note that some of the statements on this call will be forward-looking statements that reflect management's current expectations about future operating and financial results. Although management believes their expectations and assumptions are reasonable, they remain subject to significant risks and uncertainties, and actual results for future periods may differ materially from what is stated or implied during today's call. For more information, please refer to the form listing statement section in today's press release and the risk factors disclosed in the company's most recent Form 10-K and any subsequent reports it files with the SEC. Please also note that today's call will include a discussion of adjusted EBITDA, which is a non-GAAP financial measure. Important information. including required disclosures containing a reconciliation to the most directly comparable gap measure, is also detailed in today's press release. 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, Luke, and thank you to everyone for joining us today. I'd like to welcome you to our first quarter Fiscal 27 Financial Results Conference Call. Fiscal 27 is off to another strong start, We grew revenue 50% to $52.8 million in the first quarter, grew net income 66% to 2.1 million, and expanded adjusted EBITDA 71% to $4.9 million, all while successfully lapping, without repeat, a nearly $10 million digital Costco MVM in the prior year first quarter. Growing on top of that comp with meaningfully less trade investment is, frankly, A remarkable accomplishment and one that I believe speaks volumes about the durability and breadth of the demand we're seeing across our customer base, the strength of our brand and innovation pipeline, and the execution of our integrated three facility platform. Beyond the headline numbers, what excites me most is the strategic position we now hold. We entered fiscal 27 as a scaled platform with three facilities. a diversified and growing customer base, a fortified balance sheet, and a clear path towards our long-term vision of becoming the leading national one-stop-shop deli solutions provider. The first quarter validated every element of that thesis. Before we dig into the quarter, let me spend a moment on the macro backdrop. One of the earliest lessons I picked up in my career is that catching an existing current is far easier and far cheaper than trying to manufacture one of your own. And in the deli prepared, that current is still building into what I'd call a tidal wave. Progressive Grocers just released 93rd Annual Report, and the 2026 State of the Industry Survey validates exactly what we are seeing every day at Mama's. Among grocery retailers surveyed, 79% said that the meat department is the most successful at generating sales. a remarkable 30 percentage point increase from last year. Said differently, in the span of a single year, meat and more broadly protein has gone from a category retailers manage to a category retailers expect to grow with. 77% of retailers further told Progressive Grocer that prepared foods and food service represents a top strategy for merchandising and brand enhancement. Underscoring, the growth opportunity this year in the fresh perimeter and prepared foods, the very intersection where MAMA's competes every day. And 89% said that private label and store brands are our top merchandising strategy, a 16 percentage point increase over last year, reinforcing the relevance of our dual track approach of growing both our branded and private label portfolios. Last month, FMI came out with their annual U.S. Grocery Shopper Trends 2026 and reinforced and put math to this tidal wave we're seeing. 70% of respondents visit the deli department at least once a month, and one-third visit at least weekly. In our target demographic, 38% of Gen Z and 43% of millennials buy deli-prepared foods at least weekly. They're more likely to buy deli-prepared foods to save money and to eat healthier, suggesting deli-prepared foods tends to replace dining out more often. Deli-prepared departments offer shoppers an opportunity to explore and take a break from their everyday routines. This is what I foresaw nearly four years ago and why this highly overqualified team we have assembled at Mama's was willing to plant those early seeds. I could tell you these green shoots have already turned into vibrant saplings. Layered on top of these survey findings, fresh format grocers continue to capture the largest share of incremental foot traffic, with grocery stores grabbing a growing share of short midday visits from quick-serve restaurants as consumers replace restaurant meals with more cost-conscious and healthier options. Meat sales remain at record highs, with consumers increasingly viewing high-quality meats and poultry as part of a healthy diet. We continue to be in the right place at the right time with the right product portfolio. And we now have the platform to capture far more than our fair share. The last three and a half years have brought meaningful progress and laid down a durable base from which to construct a category-leading deli platform. But the underlying playbook we run against Our four Cs framework has not shifted one iota. Starting with our first C, cost. The Bayshore integration continues to be the clearest illustration of the structural margin work Skip and his team are driving. Sourcing and logistics are now run from a single centralized desk covering all three plants. Bayshore successfully transitioned to Mama's corporate ERP system, providing unparalleled insights across the business. Our production footprint has been reflowed to lift utilization, take out overtime, and pull more absorption through the system. Bayshore associates have leaned into the mama's way of doing things, and we, in turn, are picking up best practices from them. In particular, the premium product know-how they brought with them is already unlocking customer doors that have previously been closed to us. I am so excited to share that we have officially moved into our new East Rutherford expansion. adjacent, and literally sharing a wall with our existing facility. While there is more work to do, additional blast freezer and refrigerated storage is currently being installed, allowing for more efficient runs, lower overtime, and better customer service. I am so proud of Shane and the team, from our project managers to line workers who execute our major projects faster than the time before and further below budget. On gross margin specifically, Q1 reflected some labor and raw material inefficiencies and other startup costs associated with the launch of new packaging technologies and protein form factors that we deployed to support the introduction of over a dozen new items with major retailers in the quarter, the most ever in a single quarter for Mamas. These are investments in our future, and they are exactly the kind of front-loaded costs you would expect to see as we scale our business. Bayshore's gross margins continue to improve since acquisition, and we remain on track to bring that facility and the consolidated business in line with our mid to high 20s corporate target as these new items move from launch into steady state production. Moving to controls, our second C. In an industry where food safety sits at the top of every conversation, the discipline our team is demonstrating across all three facilities is nothing short of remarkable and is nothing we take for granted. This quarter saw two successful FDA unannounced audits, and while some companies fear and dread these types of audits, the only thing our team thinks to say is bring it on. Our team loves these opportunities to show our customers and the entire country what they are used to doing every single day. For me and Skip, the best part It's seeing our colleagues across facilities share learnings, highlight best practices, so their sisters and brothers can do even better than they did. If that does not describe a family, I do not know what does. An important milestone underpinning our controls discipline this quarter was the completion of our Enterprise Resource Planning, or ERP, integration across all three of our manufacturing facilities. With Bayshore now fully transitioned onto the same enterprise platform that runs East Rutherford and Farmingdale, we operate as a single, unified system for procurement, production, inventory, and sales. The benefits are already showing up in how we run the business. A faster month-end close, sharper inventory accuracy, more granular cost visibility by line and by SKU, and a stronger foundation for our analytical tools. This integrated ERP backbone is a key enabler of the operating leverage you're starting to see come through our financials, an important capability as we continue to scale towards our $1 billion vision. A huge thank you to John and his IT team, as well as to Tony and his Bayshore team for the long hours, planning, execution, and hypercare you both partnered on to deliver on time and on budget. Thank you. In addition to our ERP system, we've also advanced the implementation and capabilities associated with our WMS, or Warehouse Management System, impacting areas of labor efficiency, stock location, and inventory accuracy. We also successfully introduced and implemented the company's first ever TMS, or Transportation Management System, which will be a huge unlock for transportation planning efficiency, improved route and stop optimization, improved OTIF and service visibility, RFP capabilities and carrier compliance, not to mention Rebecca finally retiring her letter-sized dry erase board with the map of the United States. Skip would have me go on and on about the tools and capabilities we have successfully implemented at MAMAS over the past 12 months, but I hope this gives our investors just a taste of the technology we're bringing in well ahead of similarly sized companies, let alone a company in the Delhi prepared space. As our boys Gregory and Alexander would say, we are just built different. As I have said in the past, cost and controls may earn us a seat at the table, but it is our third C, culture, that keeps us there. With nearly 600 teammates now operating across three facilities, The enterprise-wide shared services model we put in place is producing real, measurable results. As Abby continues to tell me, culture is not a destination, but rather a mindset that always needs love, attention, and reinforcement. Q1 saw the launch of three employee engagement, recognition, and retention programs to do just that. Grandma's Table, our first cross-facility referral and retention program. Mama's Welcome Crew and First Taste, enhance onboarding and orientation processes with primo or buddy assignments for new hires, and a grandma's favorite spot recognition program designed to reinforce culture, engagement, and positive employee experience. Yes, the customers we capture, the new items we develop, and margins we enhance are needed for a strong business, but I could honestly tell you that the P&L is missing our most important ingredient. It is the team we're hiring, nurturing, promoting that is truly the secret sauce of our $1 billion destination. Our catapult strategy, our fourth and final C, was on full display this quarter. In addition to strong velocity acceleration and high ROI programming, we launched over a dozen new items with major retailers, including new branded SKUs at Walmart, Target, and Food Lion. Supported by the startup of new packaging technologies and protein form factors, these wins are the direct result of our continued investment in product innovation, our integrated operating platform, and our deepening partnerships with the largest grocers in the country. We expect these placements to ramp meaningfully through the balance of fiscal 27. If I may, Let me spend a moment on Costco, which continues to be a marquee example of our catapult strategy in motion. As a reminder, Q1 of last year included our first ever digital MVM at Costco, which alone delivered nearly $10 million in revenue in that single quarter, incorporating meaningful trade investment to successfully drive household penetration and step change velocity acceleration that exceeded expectations. The important point is that we lapped that $10 million comp on a whole company basis year over year, adjusting out our recent acquisition. And this was without any incremental Costco programming. In other words, this is not a story of Costco growing on top of itself. This is the entire enterprise stepping up on top of last year's higher promotional base. To me, that is one of the strongest signals you could ask for. it tells us that the Costco business itself has become structural rather than promotional. The everyday item status we secured in the Northeast late last year is delivering exactly the steady state, plannable volume we expected. And at the same time, the rest of the business has grown into a much larger and more diversified contributor. Oh, and I forgot to mention that Chris just shared with me that earlier last week, we were told that the San Diego region of Costco, actually the last holdout to ever offer us a rotation back in 2024, has decided to take our beef meatballs on as an everyday item, the second region to confirm our everyday status. Maybe Anna Mancini really was onto something 105 years ago when she made her way to Ellis Island with her now famous meatballs and sauce recipe. We continue to make progress against our goal this year of adding at least two new SKUs to each of our top 10 customers. In addition to Walmart, Target, and Food Lion, we saw successful new launches across three Albertsons divisions, two new panini items at Weiss, two non-protein items at Fresh Market, as well as a number of new wins in the convenience and meal kit channel. I am so proud of Chris and his entire team, not just for the individual wins, but rather how they prove out quarter over quarter that our one-stop shop strategy isn't just theory. but an intentional roadmap for our success for years to come. A key driver of our catapult success continues to be our commitment to quality. Our NAE, no antibiotics ever, chicken initiative, continues to resonate with today's consumers, and we're leveraging the Bayshore acquisition to cross out capabilities and new products into both our legacy accounts and our Crown One customer base. Lauren and her marketing team are also delivering in a meaningful way. Our investment in marketing and retail media continued to compound in Q1. We delivered strong returns across our top retailers while continuing to bring new customers into the brand. On Instacart, our Northeast everyday and rotational businesses carry the momentum forward. We grew total platform sales to over a million dollars with units up 34%. delivering a 5.6X return on ad spend. And 45% of our sponsored sales came from new customers. At Walmart, our branded launches went live in April, and early platform results are strong. In the quarter, attributed sales more than tripled year over year, growing to nearly $1 million, with our ROAS expanding from $10.50 last year to $29.50, meaning every dollar we spent in Walmart media returned roughly $30 in retail sales. BJ's was another standout. Attributed sales were up nearly 10x year over year, and our ROAS grew nearly 5x. The team is scaling that program efficiently, and we see meaningful room to continue. Looking ahead, with new items now on shelf across Walmart and Target, and our activation calendar running through the back half of the year, we expect this media retail momentum to continue driving trial, repeat, and branded growth. Looking to the balance of fiscal 27, we're planning to meaningfully increase our branded sales across our retail footprint through the ramp of these new introductions at Walmart and Target, the conversion of legacy private label items to branded, and the continued executions of our strategic goal of adding net plus two SKUs in each of our top 10 accounts. Our trade and marketing investments are delivering strong returns with digital and in-store programming generating measurable lifts in consumer awareness and retail velocities. Looking forward, the company I see in front of me bears very little resemblance to the one we ran even 12 months ago. We now operate a scaled three plant manufacturing footprint serve a broader and still expanding customer roster, sit on a fortified balance sheet with meaningful firepower for M&A, and rely on a team that has demonstrated in practice, not in theory, that it could integrate acquisitions and execute with excellence against the plan. Our line of sight to $1 billion in revenue has never been sharper, and I have real conviction in our ability to compound profitable growth well into the future. I'd now like to turn the call over to Anthony Gruber, our Chief Financial Officer, to walk through some key financial details from the first quarter. Anthony?

Thank you, Adam. Moving to the financial results, revenue for the first quarter of fiscal 27 increased 49.7% to $52.8 million as compared to $35.3 million in the same year-ago quarter. The increase was primarily due to item expansion at existing customers, the successful launch of over a dozen new branded items at major retailers, the contribution of the Crown One acquisition, and continued broad-based growth, which the company achieved despite lapping a $10 million digital Costco MVM in the prior year quarter and meaningfully less trade investment in the current quarter. Gross profit increased 35.3% to $12.4 million or 23.6% of total revenues in the first quarter of fiscal 27 as compared to $9.2 million or 26.1% of total revenues in the same year-ago quarter. The first quarter gross margin was impacted by labor, in raw material inefficiencies and the startup of new packaging technologies and protein form factors supporting the launch of more than a dozen new items with major retailers, as well as the continued integration of the Bayshore facility. We remain on track towards our mid to high 20% corporate gross margin target as these new items transition into steady state production. Operating expenses totaled $9.8 million in the first quarter of fiscal 27 as compared to $7.6 million in the same year-ago quarter. As a percentage of revenue, operating expenses declined to 18.5% from 21.6% in the prior year quarter, demonstrating the operating leverage in our model as we scale as well as intentional decisions to move some SG&A marketing investments into gross to net trade to support our new item launches. The change in absolute dollars was partially due to the Bayshore acquisition, new digital strategies, and enhanced product marketing, new management hires, and further technology upgrades to drive actionable insights faster and deeper into the organization. Net income for the first quarter of fiscal 27 increased 66.3% to $2.1 million, or 5 cents per diluted share, as compared to net income of $1.2 million, or 3 cents per diluted share, in the same year-ago quarter. First quarter net income totaled 3.9% of revenue, as compared to 3.5% in the same year-ago quarter. Adjusted EBITDA, a non-GAAP measure, increased 71.2% to $4.9 million for the first quarter of fiscal 27 as compared to $2.8 million in the same year-ago quarter. Cash and cash equivalents as of April 30, 26, totaled $24.4 million as compared to $20 million as of January 31, 26. This increase was primarily driven by improved profitability, strong operating cash flow generation, and ongoing working capital optimization. As of April 30th, 26, total debt stood at $5.1 million. The robust balance sheet, combined with our credit facilities and strong cash flow generation, positions us extremely well to pursue the organic and inorganic growth opportunities that Adam described. This completes my prepared comments. Now, before we begin our question and answer session, I'd like to turn the call back to Adam for some closing remarks. Adam?