MamaMancini's Holdings, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Mama Mancini's third quarter fiscal 2023 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. If you have a question, please press star 1 on your touch-tone phone. If you'd like to withdraw your question, please press star 2. If using speaker equipment, please lift the handset before making your selections. This conference is being recorded today, December 12, 2022, and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Mama Mancini CEO Adam Michaels, COO Matt Brown, and CFO Anthony Gruber. Before we get started, I'd like to read a disclaimer about forward-looking statements. This conference call may contain, in addition to historical information, forward-looking statements within the meaning of the federal security laws regarding Mama Manzini's. 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 based 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. Therefore, 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 accompany files with the U.S. Securities and Exchange Commissions. In addition, such statements could be affected by risks and uncertainties related to factors beyond the company's control. Matters that may cause extra 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. 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 CEO Adam Michaels. Adam, the floor is yours.

Thank you, Operator, and thank you, everyone, for joining us today. I'd like to welcome you to our third quarter fiscal 23 financial results conference call. As this is my first quarter as CEO of Mama Mancini's, I wanted to thank my leadership team and our board for the opportunity to help lead this storied company. I've used the past three months to spend time in the field, speaking with consumers, customers, and our sales partners. It is inspiring to hear what our brands mean to them and how they are using them to thrive during the pandemic and make family time even more special. I'm proud of our team and prouder of the quality and breadth of our portfolio. Thank you. Now, back to business. Throughout the third quarter, we continue to execute, delivering what we believe is a sustainable return to profitability, further building the foundations for our national deli solutions company, all with the goal of accelerating and expanding our existing portfolio brands while strategically leveraging incremental consumer-driven innovation and accretive near-end acquisitions to fill out gaps in our portfolio. Our vision is to become a one-stop shop for prepared foods for grocery, mass, club, and convenience channels, addressing the $30 billion-plus food service and prepared foods market with our grocer partners. This approach fits well with the significant pandemic-related lifestyle changes that consumers faced in the last three years, with many focusing more than ever on quick, clean, and fresh meals made with better ingredients at a price more affordable than eating out. On the other side of the counter, retailers continue to face significant supply chain and labor challenges, and are seeking labor-efficient, reliable solutions for their hot bar, deli, and grab-and-go offerings. As the country continues to evolve stronger out of the pandemic, recessionary pressures will continue to focus our consumers and retailers on high-quality, easy-to-prepare, and affordable meal solutions, all of which Ma Mancini delivers on. We feel our offerings position us well for any expected macroeconomic forces. The realization of our goal to shape Mama Mancini's into a one-stop shop for these deli prepared food solutions has required a step change in our corporate structure in many ways. My immediate term focus has been and will continue to remain on the continuous improvement of our three C's strategy, cost, controls, and culture. On the cost front, we have designed and implemented new approaches to cost management. driving noticeable improvements in procurement, manufacturing, and logistics management capabilities. As Matt will mention later, our efforts to more efficiently manage labor costs, particularly overtime, outbound logistics, and cold storage are realizing noticeable returns, allowing us to reinvest in our business. Commodity costs continue to improve in the quarter as well, providing significant tailwinds for our margin profile. While Q3 gross margins improved over 1,100 basis points as compared to the first half, we believe there is even more opportunity to drive operational efficiencies across both of our facilities. On the controls front, we brought in our new CFO, Anthony Gruber, to help build a strong foundational finance rigor along with the entrepreneurial spirit critical to succeed. We put new financial and operational controls in place to help our teams and provide agility for sales and operations staff. The weekly and monthly cadence of meetings, as well as the clear and actionable KPIs we put in place, are allowing our teams to communicate easier, make decisions faster with more information. Our quality and consumer engagement playbooks are bringing us closer to the consumer to understand their evolving needs and usages. We're rolling out our new sales broker scorecards so we can all be clear on expectations and track progress to our mutual goals. Our enhanced approach to costing and pricing are already driving margin expansion, and we expect to continue to capture this profit growth while also reinvesting some of this new margin to serve as rocket fuel for our accretive marketing and trade promotions. And last, but certainly not least, building a company culture that is geared for and incentivizes profitable growth. Our people are at the core of what we do, and hiring, promoting, and retaining talent is paramount to our long-term success. We speak of our vision often to reaffirm, reinforce, and remind all of our employees that our one-stop shop deli solution strategy. We have performed full talent assessments for our management, investing in our people, and upgrading our talent not only to support today, but to build for tomorrow. Our new CFO is just the beginning. We have already started to build out the finance function. For example, our new controller started today, as well as filling critical needs in logistics and soon procurement. And all of this will not require long maturation. It's happening as we speak. Our team's enhanced commitment to quality, including my personal favorite, our monthly grandma quality meetings to ensure our products are as good as Mama made them, are already being realized and is what drove us to once again win number one in four categories during the 2022 QVC Customer Choice Awards. The results we have seen in the short time since I started at Mama Mancini's has been unprecedented. Supported by strong organic growth, as well as growth from our recent acquisitions, we made a sustainable return to profitability and achieved our previously announced goal of $100 million annualized sales run rate a full quarter earlier than expected. In addition, while it's still very early, preliminarily, the fourth quarter is shaping up well, and we are on a healthy trajectory moving into calendar year 23 and beyond. Turning to specific wins in the third quarter, we launched into three new customers and drove double-digit new items into existing customers, half of which were through our cross-selling of our new T&L products into legacy relationships. Our goal is to grow the average items carried per store several fold to make it easier for consumers to find our products on shelf as well as making our logistics more efficient. Looking ahead to the fourth quarter, we have already successfully sold in and received orders from three new customers and shipped an incremental double-digit portfolio of new items into existing customers, further expanding the breadth and depth of our coverage. Overall, we see a bright future for both our top and bottom line results. While we are aware and actively discuss potential headwinds, particularly in recessionary pressures and commodity inflation, we believe we are building a more resilient, flexible organization that is prepared to pivot as needed. In summary, we have seen increasingly strong momentum in recent months. I firmly believe that we are well positioned to build significant additional momentum in calendar year 23 as we drive organic growth, grow the team, expand our capabilities, and seek to become brilliant at the basics. As we continue to fill the deli case, we are evaluating a corporate name change to better reflect our platform company model. This is all with the goal of building sustainable value for our shareholders over the long term. I look forward to further achievements as we seek to realize Mama Mancini's significant untapped potential. With that, I'd like to now turn the call over to Anthony Gruber, our recently appointed Chief Financial Officer, to walk through some key financial details from the third quarter of fiscal 23. Anthony?

Thank you, Adam. Revenue for the third quarter of fiscal 2023 increased 137% to a record $25.7 million, as compared to $10.9 million in the same year-ago quarter. The increase in revenue for the third quarter was driven by organic growth across all divisions, chiefly through cross-selling, as well as by inorganic growth through the acquisition of T&L and Olive Branch. Gross profit increased to a record 6.6 million, or 25.5% of total revenues in the third quarter of fiscal 2023, as compared to 2.7 million, or 24.4% of total revenues in the same year-ago quarter. Gross profit increased in the third quarter back to targeted levels based on normalization of commodity costs, successful pricing actions, and strong sales growth. The company continues to identify procurement and logistics efficiencies and cost savings through stronger buying power created through the acquisition of T&L and Olive Branch. Operating expenses totaled $5.1 million in the third quarter of fiscal 2023 as compared to $2.7 million in the same year-ago quarter. As a percentage of sales, operating expenses decreased to $19.7 in the third quarter of fiscal 2023 as compared to 24.4% in the same year-ago quarter. Operating expenses as a percentage of sales benefited from synergies created through the acquisitions of T&L and Olive Branch. Income from the equity method investment in Chef Inspirational Foods totaled $0.1 million in the third quarter of fiscal 2023. Net income for the third quarter of fiscal 2023 totaled $1.1 million, or three cents per diluted share, as compared to an approximate break-even in the same year-ago quarter. Adjusted EBITDA, a non-GAAP term, increased to $2.1 million for the third quarter of fiscal 2023 as compared to $0.3 million in the same year-ago quarter. Cash and cash equivalents as of October 30, 2022, were $3.5 million as compared to $0.9 million at January 31, 2022. Taken in tandem with our credit line, which we paid down by $1.5 million in the quarter, and positive $3 million in cash flow from operations in the quarter, I'm comfortable with our liquidity position relative to our near-term requirements. This completes my prepared remarks. I'd like to now turn the call over to Chief Operating Officer Matt Brown for an operations update. Matt?