Mama's Creations Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
September 12, 2023

There are 6 speakers on the call.

Operator

Afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Mama's Creation Second Quarter Fiscal 20 24 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.

Operator

This conference is being recorded today, September 12, 2023, and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Mama Creations' Chairman and CEO, Adam L. Michaels 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 federal securities laws regarding Mama Creations.

Operator

Forward looking statements These 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 or are likely to differ materially from what is expressed or forecasted in the forward looking statements due to the numerous factors discussed from Time to time in this report and in other documents, which the company files with the U. S.

Operator

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 other and any major litigation regarding the company. In addition, throughout today's call, the company may refer to adjusted EBITDA on Non GAAP financial measures, 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 Mama Creations website under the Investors tab.

Operator

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 floor Over to Chairman and CEO, Adam L. Michaels. Adam, the floor is yours.

Speaker 1

Thank you, operator, and thank you to everyone for joining us today. I'd like to welcome you to our Q2 fiscal 2024 financial results conference call. I am pleased to announce another very strong quarter. This time highlighted by 8.5 percent revenue growth and the expansion of our gross margin profile into the 30% range. As we build the foundation for robust revenue growth in the second half, this margin enhancement ensures we are well positioned to grow profitably to make the most of each sale.

Speaker 1

In the one short year since I joined the company, our team has worked together to drive a significant turnaround in the business, improving profitability from a net loss a year ago to the robust 7% net income margins we saw this quarter. This does not happen by chance. We developed a plan We executed that plan to realize improvement firm wide and our sustained margin enhancement is the result of doing countless small things right. Looking ahead, we see opportunities for even further improvement. Just last month, our team shared with our Board and received approval for the most transformational capital investment request in the company's history, all funded from cash flow from operations.

Speaker 1

These strategic investments in automation and in sourcing value added capabilities have the potential to meaningfully enhance our margin almost immediately, allowing us to reinvest that margin as rocket fuel for growth. As I have often said, it is better to ride a wave than fight against it. We completely support the view well documented in the current industry press That more than ever consumers and retailers desire for fresh, clean and easy to prepare meals has never been stronger. It is important to remind ourselves that grocery store prepared meals are not a new habit we have to create. More than 8 in 10 consumers reported to have eaten At least one type of grocery prepared meal in the past 3 months.

Speaker 1

94% of consumers purchase items from the in store deli. This is not a trend we have to create, but it is one that we will happily ride and accelerate. Consumers are continuing to eat out less and transitioning to grocery prepared foods to meet their evolving needs. A recent Mintel survey on Prepared Foods highlighted the evolving attitudes towards prepared meals. 72% of respondents agreed that a prepared meal is a great way to try new cuisines, 71% agreed that prepared meals have gotten healthier and 68% believe that it is worth paying for higher quality prepared meals.

Speaker 1

This research reinforces and quantifies what we have been sharing with you over the past 12 months and underpins our strategy. Despite economic challenges, demand remains high for clean ingredient meals that are high quality, affordable and quick to prepare as part of a modern on the go lifestyle. Retailers are equally adapting to these consumer trends to deliver on these requests. While they are trying to meet these needs, they continue to face significant supply chain and labor challenges, which are still running at or near record highs and are seeking labor efficient, reliable solutions for their hot bar, deli and grab and go offerings. In a recent fresh foods trend survey of grocers, 2 thirds said that they will increase their assortment of prepared foods over the next 12 months.

Speaker 1

The deli is becoming the grocery store's kitchen with the rise of the grocerant, an industry term play on words for grocery store We firmly believe Prepared Foods will continue to grow and take market share from frozen, center aisle and out of home occasions. These consumer and retailer trends have a flywheel effect, strengthening and mutually reinforcing one another. As retailers bring in high quality, more affordable prepared meals, consumers will increase the frequency and basket sizes of these purchases. Highlighted last month by The Wall Street Journal, as the price gap widens between out of home food inflation, which was at 7.1% in July Versus at home food inflation, which was half that at 3.6%, competition will only get more heated And more and more food dollars will flow to grocery prepared meals. As we move through 2023 and beyond, today's recessionary pressures We'll continue to focus our consumers and retailers on high quality, easy to prepare and affordable meal solutions, all of which Mama's Creations delivers on.

Speaker 1

As I have said before, realizing our goal of shaping Mama's Creations into a one stop shop for deli prepared food solutions has required a step change in our corporate structure in many ways. Throughout the Q2, we remain laser focused on the continuous foundational improvement of our 3C 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 margins to grow from 12% in the same year ago quarter into the 30% range as you saw today. Our new ability to load share and produce leading products across our two facilities rather than having each one single sourced has established the framework to enable An unparalleled level of flexibility that will ultimately provide us with both redundancy in production and lower costs. Our new found ability to load share coupled with our maniacal focus on critical labor KPIs helped us realize a 310 basis point improvement in labor efficiency versus a year ago.

Speaker 1

Rate efficiencies driven by dedicated resources and greater communications across our facilities added another 30 basis points of improvement versus prior year. On the controls front, I'm proud to say that we expect to transition our T and L Creative Salads division over to our NetSuite ERP system by our next earnings call, At which point, our full company will be on the NetSuite ERP platform, providing us with an unprecedented degree of actionable insights into the details of our operations. Having all of our financial, operational and sales analytics at the touch of a button is truly Something we saw after integrating NetSuite at MamaMancini's and Olive Branch. As I have said before, what gets measured gets Our company culture is now aligned, incentivizing profitable growth at all levels of the organization, While understanding that our people are at the core of what we do, ultimately hiring, promoting and retaining talent is paramount to our long term success. To that end, we continue to formalize processes throughout the company with the goal of building a more standardized, resilient organization.

Speaker 1

These improvements span from the operational basics as formalized hiring and HR policies, our first ever company wide employee handbook in both English and Spanish, holding our first ever town hall meetings, to the more complex such as a new approach to trade promotion With clearly defined policies and procedures, each new improvement making a stronger high performing team. The rollout of Mona's creations last month provided the perfect opportunity as a team To coalesce around our new mission and vision while making time to show off some of our new company's swag. We are seeing the pride our employees have with our brand, our products and the consumer focused culture we have imbued in our We continue to invest in our people to further grow capabilities. And while not every hire gets a press release, We have several new employees in the areas of sales, operations, inventory management and trade promotion that have already brought their personalities, Potential and passion for our one stop shop deli solution strategy. I am incredibly proud of the rapid Progress we have made to strengthen our organization in all respects.

Speaker 1

These foundation building efforts are critical to support our next leg of growth. Earlier this year, we highlighted the need and committed to building an enhanced Sales and marketing capability for our organization. I'm proud to say that we have exceeded even our own high expectations. Lauren Sella has done a tremendous job since being hired as our Chief Marketing Officer. Her work to launch Mama's creations last month, Our new branding and website are already paying dividends.

Speaker 1

Since our last call, we've made significant progress growing our feet on the street to take our sales reach to the next level. Spurred by our hiring of our Senior Director of Trade Strategy, a West Coast sales lead And the addition of multiple salespeople from the acquisition of Chef Inspirational Foods, we are well positioned to begin to execute upon our second half sales goals. The recent introduction of the Mama's Creations brand aligns well with the second half launch of our supercharged sales organization. These new products create incremental dining opportunities and are vital for expanding our average items carried in grocery stores. As consumers actively seek out flavor tourism And look to prepared meals to try out new cuisines, Mama's Creations will be there to meet those needs.

Speaker 1

Mama's Creations made a splash at IDDBA 2023 Annual Show in June, a premier industry event with over 10,000 attendees. Alongside our crowd favorite beef meatballs and sausage and peppers from Mama Mancini's, We unveiled General Tso's Chicken, Chana Masala, Nashville Hot Paninis, all under the new Mama's Creations brand. The response was positive, sparking productive discussions with both existing and potential grocery store customers interested our expanded offerings. Furthermore, we delighted retailers by introducing new in a cup products to capture incremental on the go snacking occasions. These include sausage and peppers, chicken cacciatore, Turkey meatballs and beef and rice varieties.

Speaker 1

Extending shelf life from 5 to 21 days addressed a key retailer concern, Enhancing product interest and aligning with important performance metrics like reduced replenishment time and waste. We have already received orders for our new cups and a number of retailers are already receiving deliveries. Most recently, we expanded our partnership with Costco, penetrating the Los Angeles region, marking the 4th out of 8 regions nationally. This growth includes our first ever non meatball product, a 3 pounds sausage and pepper sleeve set for December rotation alongside MamaMancini's beef meatballs. 2023 has seen us expand with Costco both in terms of order volume, which already has made 2023 a record year with this customer, and in terms of order sizing, Habit recently received a record $1,000,000 plus order.

Speaker 1

This secures our triple play with Costco, Having the largest orders in our history with the most number of regions in the year and now having multiple items in a year. We look forward to working closely with Costco to explore other exciting products for their highly engaged customer base. In summary, I firmly believe that we are well positioned to leverage the build out of our sales team and the introduction of several highly incremental products to take market share, continue to grow our SKUs per customer and ultimately become the premier one stop shop deli solution provider. As we 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 my fellow shareholders for years to come. With that, I'd now like to turn the call over to Anthony Gruber, our Chief Financial Officer to walk through some of the key financial highlights from the Q2 of fiscal 2024.

Speaker 1

Anthony?

Speaker 2

Thank you, Adam. Revenue for the Q2 of fiscal 2024 increased 8.5% to $24,800,000 as compared to $22,900,000 in the same year ago quarter. The increase was largely attributable to strong organic volume growth driven by new customers and successful cross selling efforts into existing customers, which increased our weighted average items carried metric by more than a full point versus prior year to over 7 items carried in the 2nd quarter. Gross profit increased 175 percent to $7,500,000 or 30.3 percent of total revenues In the 2nd fiscal quarter of 2024 as compared to $2,700,000 or 11.9 percent of total revenues in the same year ago quarter. The increase in gross margin was primarily attributable to the normalization of commodity costs, Successful pricing actions and improvements in operational efficiencies across the organization.

Speaker 2

The company continues to identify procurement, manufacturing and logistics efficiencies And cost savings through strong buying power created through the acquisition of T and L Creative Salads, Olive Branch and most recently Chefspirational Foods. Operating expenses totaled $5,200,000 in the Q2 of fiscal 2024 as compared to $3,600,000 in the same year ago quarter. As a percentage of sales, operating expenses increased in the Q2 of As a percentage of sales increased due to the addition of several new key hires brought new and differentiated capabilities to the organization. Net income for the Q2 of fiscal 2024 increased 3 35 percent to $1,700,000 or 0 point 0 $5 per diluted share as compared to a net loss of 0 point 7 1,000,000 or $0.02 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.

Speaker 2

Adjusted EBITDA, Our non GAAP term increased 857 percent to 2,900,000 For the Q2 of fiscal 2024 as compared to an adjusted EBITDA loss of $400,000 in the same year ago quarter. Cash and cash equivalents as of July 31, 2023 were $5,600,000 as compared to $4,400,000 as of January 31, 2023 $1,800,000 a year ago. The increase in cash and cash equivalents was driven by $1,800,000 in cash flow from operations In the Q2 of fiscal 2024, dollars 600,000 of which was used to pay down the company's debt and $1,000,000 of which was used to pay cash due at closing as part of the CIS acquisition. As of July 31, 2023, total debt stood at 10,800,000 Looking ahead, we believe that our normalized gross margin profile will continue to hover in the high 20% range. Long term leveraging strategic CapEx investments, procurement efficiencies, continuous operational improvements And our acquisition of CIFs, margins could consistently be maintained in the low 30% range, while rightsizing our trade promotion investments.

Speaker 2

Turning to net income, while we continue to target mid single digit net income margins, We believe that over the long term, this could be improved to approximately 10% with adjusted EBITDA margins in the teens percentage range. 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?

Speaker 1

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 to reinvest that rocket fuel into the business. In addition, we will continue to leverage our enhanced people capabilities, our CapEx efficiency and our marketing and trade to accelerate Our aspiration to be the premier one stop shop deli solution. To summarize, This will be achieved by launching highly incremental products to further increase the SKUs per customer, introducing our products and new customers via our supercharged sales team, put in place high ROI trade and marketing programs to accelerate existing product velocities and further enhancing our margins through continuous operational improvements at every level of the organization. We believe that this approach will not only position Mama's creations as the one stop shop deli solution provider, that drives sustainable shareholder value creation over the long term.

Speaker 1

With that, I'll turn it over to the operator to begin our question and answer session. Operator?

Operator

Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. Our first question comes from the line of Eric Deslois, Craig Hallum Capital Group. Please proceed with your question.

Speaker 3

Great. Thank you for taking my question and congrats on the very impressive quarter here. I guess specifically, I've been impressed by the success you guys have had so far in increasing those SKUs per store. Obviously, that's kind of a key part of this one stop shop vision. So this quarter, more than one full point to over 7.

Speaker 3

I'm just wondering if you could help us understand where you think this number can go and however you want to take that, whether that's sort of opportunity over the next year or 2 even just as part of this broader one stop shop vision, what does that opportunity look like for the company? Thank you.

Speaker 1

Opportunity From NAIC and average items carried, we started at 5. We've been together now less than a year. We're up to 7. I think we can do a lot more. Just think about the secret is the fact that we have the full spectrum.

Speaker 1

So we have the proteins. We have beef meatballs, meatloaf, Sausage and peppers, great. You don't like the beef? We got chicken. We got balsamic chicken.

Speaker 1

We got chicken strips, breaded chicken. You don't like meat at all? We have salads, green salads. We have Grain salads, whether it be Mediterranean farro, Israeli couscous, you don't like any of that. We have sandwiches.

Speaker 1

You like paninis? I got Puns of paninis, you don't like that, I have wraps. We have olives. So sincerely, I think I just named 6 or 7, I gave you 3, 7 times 3 is 21. And I promise you every single one of those items we're selling today.

Speaker 1

So it's we don't even have to innovate, we have the offering. So what we see, it's beautiful. I've mentioned to you, we've done a great job at BJ's. Literally, when I started, we had like one item. Now we have 10 items.

Speaker 1

We got 4 new items into Weiss, 5 new items into Hannaford's, 4 new items into Acne, I mean I could go on. What's happening is they realize now we have these offerings and our sales team is doing a great job, already has great relationships with these customers. Now it's just easier for them. So as a buyer, I could either have to deal with 25 different people. That means 25 trucks coming in every day, 25 accounts receivables and making sure they're sending the invoice right.

Speaker 1

Or I could call Mama's Creations and whether I want a protein, a salad, sandwich, olives, it's one invoice. It's one truck coming. It legitimately just makes their life easier. And that's where we're seeing it and it's working. Every day it's working because just a reminder, I think the 7 almost understates it.

Speaker 1

That's a weighted average. So when you get a new item in, a new customer, they usually start small. So that's going to temper that number. As it goes up, as time goes on, they keep adding to that portfolio. So I feel great that I gave you 21% and I could go higher than that.

Speaker 3

Yes. No, that's very impressive and great color. I appreciate that. My next question is kind of on margins and The new hires that you guys have done, so nice margin improvement year over year despite making those several new key hires. I'm just wondering if you could help us understand your hiring needs for the leadership team over the next year or so.

Speaker 3

Any more key roles to fill that we should be aware of? And then kind of overall, I would love to hear your view on sort of how we should expect operating leverage to play out going forward? Thank you.

Speaker 1

Yes. I think we're most of the way there. I mean, I'm really proud and hopefully you guys see, believe me, our HR team is pretty tired. We've brought in a lot of great folks and filled a lot of capability gaps that we had. I think that's going to slow down considerably.

Speaker 1

With the gun to my head right now, I think that there's I can only think of we talk about 2 or 3 more people with specific capabilities. I've mentioned earlier, I'm really excited about e commerce, Bringing someone dedicated like that, I think that there's opportunities for with our in the cups offering and I told you that Convenience is a big focus for us. I'd love to get a dedicated convenience channel person. So hopefully what you're seeing is, first of all, they're almost all exclusively Sales, right? It's going to drive revenue, but now you're at the onesies and twosies.

Speaker 1

So I think what we are at now is we have the capabilities we need And now it's about driving for more and more revenue To offset the increased capabilities that we have. So yes, it's all about absorption, right? Yeah.

Speaker 3

You guys have done a great job so far and certainly looking forward to seeing what else you guys can do. Thank you for taking my questions. I'll hop back in the queue here.

Speaker 1

Thanks again, Eric.

Operator

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

Speaker 4

Hey guys, thanks for taking my questions. Nice work on the quarter. Just wondering if you can talk a little bit about your level of confidence with the revenue acceleration in the second half of the year and how much visibility you have there?

Speaker 1

Yes. Thanks, Ryan. We feel good. So first of all, let's be clear, we're bringing these folks have just come on. You got to find out where the bathroom is on the 1st day and So I don't see it happening immediately, but we already have great stuff.

Speaker 1

So I think the combination of Had a very successful IDDBA in June. We're already seeing those new orders coming in. It's great to see we've been working on a number of Other businesses that we've been cultivating, I feel good. I feel good with where we are. But Again, tempered.

Speaker 1

It's going to take time. So the way we look at it is roughly you can look at the deli. Deli is growing in the mid single digits And we expect very much to be gaining market share. That is our goal. That is what we're looking at every month and every quarter.

Speaker 1

We've done that every single month that we've been together, every single quarter we've been together and I expect that to continue. So the way I look at it is Continue to gain market share in the deli and deli prepared space.

Speaker 4

Got it. That's helpful. And then obviously really gross margin during the quarter, around 30% or so. So how should we think about that in the second half of the year? I mean, is that 30% the new baseline?

Speaker 4

I know you talked a little bit about Coming into kind of the high 20s, but where do we kind of come down from that 30%? Or how

Speaker 5

should we think about that in the second half of the year?

Speaker 1

Yes. I still want to stick to the high 20% number. I'm all for under promising and over delivering. One thing that I've been very clear on is I want to continue to invest. So I definitely want to be in this high 20s.

Speaker 1

If there is more margin to be had that gives us more opportunity to drive our marketing agenda. That gives us more margin to drive trade promotion. How do you drive more trial? So one thing that you've heard me say before and you see all The surveys that are done, if I could get it into consumers' mouths, they recommend it to their friends and they keep buying it. So I am very passionate about taking this additional margin and reinvesting to drive more trial.

Speaker 1

It's really exciting Now with our new Head of Trade Strategy, Marketing, we're actually getting into more Marketing and trade programs with our most strategic customers. So we're having a blast really working with the Ah, holds and Albertsons and Sam's Clubs of the world to see Publix, Weiss, I mean, I could go on forever, How we could accelerate our growth. So now that we have the margins, now we can reinvest it. So it's not about how high can I go with the margins, it's How do I use that margin dollars to supercharge the top line? That's where we're focused on.

Speaker 4

Got it. That's helpful. Thanks for taking my questions.

Speaker 1

Thanks, Ryan.

Operator

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

Speaker 5

Congratulations. Great quarter with great momentum.

Speaker 1

Thanks Howard.

Speaker 5

And you've talked about, I guess, the efficiencies, but is there do you still have room to take a little bit of price If you wanted to or as you increase the number of SKUs On your customer shelves, is there a possibility of a little more price taking?

Speaker 1

Yes. What I think is wonderful and the whole team does an amazing job and you've heard me say this before, we are so vigilant. We are tracking our like invoice level profitability, SKU level profitability, Literally on a weekly basis, sometimes on a daily basis. So we are seeing and watching both the pricing side of it, But then also every single day we're getting on what's happening with commodities, chicken and beef, such that we are just incredibly reactive and agile If that is required. I think that what's great is we have tremendous relationships with our customers, longstanding relationships with our customers And they see the same things we do and we share that information.

Speaker 1

So first of all, I feel great that where we've priced, We built in additional. So we don't every price every change in commodities we don't have to immediately react because we've already kind of factored some of that in. But if it is required, yes. Recently, we had to move on 2 particular items and we got it in. We have a great sales team That is just very close with the customer.

Speaker 1

They see where we are. I've told you before, quite honestly, Probably last year and even the beginning of this year, we almost didn't even keep up with full food and beverage inflation. So customers see us As there's still room for us if needed. But I think the combination and it's really important. Yes, there is the pricing element to it and Every single day of the week.

Speaker 1

But the other thing that Matt and Anthony are doing an incredible job on is Managing our operations and hopefully you're seeing every day we're getting them better at freight, at procurement, at labor. So yes, I got the pricing opportunity, but I also every day I'm getting more and more efficient with what I'm doing, which gives me more flexibility because I don't have to constantly go back Not to the customer, but to the end consumer. I don't want to raise prices too high that the end consumer has to make trade offs. So it's great. It's really the gift of getting the best of both worlds, price and operational efficiency.

Speaker 5

Okay. And in terms of your sales team and Your existing customers, are you are they targeting some of your customers that are increasing their, I guess, Real estate within the deli department and is that a focus and a push for you guys?

Speaker 1

So the question is, are our customers so our customers are actually Expanding, it's one of the things that was wonderful. Our customers are actually expanding their shelf space. So what they have to do is they have to go to their trusted Manufacturers and say, guys, I have more room. Do you have anything else for us? And that's what opens the door for us to, yes, We have originally maybe the sausage and peppers and we might have some of the grilled chicken.

Speaker 1

Hey, but have you tried our new Korean meatballs, Korean style meatballs or Have you tried the General Tso's Chicken or have you tried this new, I'm really we're doing really well now with our paninis. So they're actually they need more stuff. Remember I mentioned 2 thirds of customers said that they're going to be expanding their prepared food space.

Speaker 5

Right.

Speaker 1

They need us. And we have shown both quality and service that we're the right guys to give the additional business to.

Speaker 5

Okay. And one last one, is the CapEx or the increase in CapEx spending going to start in the second half of this year And throughout next year or is it going to start next fiscal year?

Speaker 1

It's going to start yesterday, Howard. We are so excited about the investments that we're For our business, we've actually already ordered a whole bunch of stuff. We are well on our way with that Because it's just going to drive and like I mentioned just immediate margin improvement. There is so much opportunity for us And not just capacity expansion because we're doing so well, but for actual margin and automation To actually improve our margins. So we have the footprint, which is great.

Speaker 1

And yes, I hope to see it. We're already literally, we're already doing it and planning for it.

Speaker 5

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

Speaker 1

Thanks, Howard.

Operator

That concludes our question and answer session. I'd like to hand it back to Chairman and CEO, Adam Michael. Please conclude.

Speaker 1

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 our fellow shareholders and execute upon our vision of becoming a national one stop shop GALI, Solution Provider. Thank you.

Operator

Ladies and gentlemen, this does conclude today's teleconference.

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Key Takeaways

  • Mama’s Creations delivered 8.5% revenue growth to $24.8M in Q2 FY2024, expanding gross margins into the 30% range and achieving 7% net income versus a year-ago net loss.
  • The company secured board approval for its largest-ever capital investment in automation and value-added sourcing, fully funded by operating cash flow to boost margins and reinvest in growth.
  • Management emphasized strong consumer and retailer demand for fresh, clean, easy-to-prepare grocery meals, underpinning its strategy to become a one-stop shop deli solution provider.
  • Execution of the 3C strategy—Cost, Controls and Culture—drove a 310bps labor efficiency gain, 30bps rate improvement, and full ERP rollout for enhanced operational insights.
  • An expanded sales and marketing team lifted average SKUs per store to over 7, introduced new “in a cup” and global-flavor products at IDDBA, and grew Costco distribution to four regions.
A.I. generated. May contain errors.
Earnings Conference Call
Mama's Creations Q2 2024
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