Mamas Creations Inc
For the period ended Jul 31, 2024. Filed Sep 10, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2024 · Filed Sep 10, 2024
MAMA$13.40+3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-04-30; filed 2024-06-11.
0001628280-24-027669
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-07-31; filed 2024-09-10.
0001628280-24-040029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 42 previous paragraphs and 58 current paragraphs.
19 unchanged; 21 reworded; 9 added; 2 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
•Insurance expense decreased by approximately$213 thousand mainly related to updated terms of coverage;
Current report
•Professional fees and director fees decreased by approximately $73 thousand mainly related to private offerings done in the prior year;
Current report
•Freight related expenses decreased by approximately $112 thousand mainly related to a greater focus on full truckload sales versus less than full truckload sales as well as stronger supplier management of carriers.
Current report
•Other operating expenses increased by approximately $174 thousand due to additional travel and office expenses; and
Current report
•Commission expenses increased by approximately $203 thousand due to increased sales; and
Current report
•Other Expenses: Other expenses decreased by approximately $118 thousand to $63 thousand for the three months ended July 31, 2024, as compared to $181 thousand for the three months ended July 31, 2023. The decrease is primarily due to interest income of approximately $63 thousand and a decrease of interest expense of approximately $127 thousand, due to a lower debt balance.
Current report
Results of Operations for the Six Months Ended July 31, 2024 and 2023
Current report
•Commission expenses increased by approximately $219 thousand due to increased sales;
Current report
•Insurance expense decreased by approximately$166 thousand mainly related to updated terms of our coverage; and
Removed paragraphs (2)
Previous report
•Professional fees and director fees increased by approximately $166 thousand due to the growth of the Company and the use of consultants to achieve manufacturing efficiencies as well as information technology integration; and
Previous report
•Freight related expenses increased by approximately $140 thousand due to increased sales.
Reworded paragraphs (21)
Previous wording
For the three months ended April 30, 2024 and 2023, the Company reported net income of approximately $0.6 million and $1.4 million, respectively. The change in net income between the three months ended April 30, 2024 and 2023 is due to the to the changes in net sales, cost of sales and operating expenses described below.
Current wording
For the three months ended July 31, 2024 and 2023, the Company reported net income of approximately $1.1 million and $1.7 million respectively. The change in net income between the three months ended July 31, 2024 and 2023 is due to the changes in net sales, costs of sales and operating expenses described below.
Previous wording
Net sales: Net Sales increased by approximately 29.1% to $29.8 million during the three months ended April 30, 2024, from $23.1 million during the three months ended April 30, 2023. The increase in sales is due to both volume gains, successful pricing actions, and the acquisition of CIF in June 2023. Volume gains were driven by increased demand at existing customers, successful trade and marketing promotions, same-customer cross-selling, and product additions.
Current wording
Net sales: Net Sales increased by approximately 14.5% to $28.4 million during the three months ended July 31, 2024, from $24.8 million during the three months ended July 31, 2023. The increase in sales is due to volume gains, successful pricing actions, and the acquisition of CIF in June 2023. Volume gains were driven by increased demand at existing customers, successful trade and marketing promotions, same-customer cross-selling of new items, and new customer door expansion.
Previous wording
Cost of sales: Cost of sales increased by approximately 34% to $22.4 million or 75% of Net Sales during the three months ended April 30, 2024, from $16.8 million or 72% of Net Sales during the three months ended April 30, 2023. The increase in cost of sales as a percentage of Net Sales is due to increases in commodity costs, in particular the price of chicken, partially offset by improvements in procurement and manufacturing efficiencies.
Current wording
Costs of sales: Costs of sales increased by approximately 24% to $21.5 million, or 76% of Net Sales, during the three months ended July 31, 2024, from $17.3 million, or 70% of Net Sales, during the three months ended July 31, 2023. The increase in costs of sales as a percentage of Net Sales is due to increases in commodity costs, in particular the price of chicken, partially offset by improvements in procurement, manufacturing and labor efficiencies.
Previous wording
•Advertising expenses increased by approximately $204 thousand due to new strategies and enhanced focus to drive increased velocities of our existing products;
Current wording
•Advertising expenses increased by approximately $214 thousand due to new strategies and enhanced focus to drive increased velocities of our existing products;
Previous wording
•Amortization of intangible assets increased by approximately $278 thousand due to the acquisition of CIF, which was completed in June 2023;
Current wording
•Amortization of intangible assets increased by approximately $211 thousand due to the acquisition of CIF, which was completed in June 2023;
Previous wording
Gross Profit Margin: The gross profit margin was 25% and 28% for the three months ended April 30, 2024 and 2023, respectively. The decrease in gross profit margin between the three months ended April 30, 2024 and 2023 is due to increased commodity costs, partially offset by customer price increases and manufacturing efficiencies.
Current wording
Gross Profit Margin: The gross profit margin was 25% and 29% for the three months ended July 31, 2024 and 2023, respectively. The decrease in gross profit margin between the six months ended July 31, 2024 and 2023 is due to increased commodity costs, partially offset by customer price increases and manufacturing efficiencies.
Previous wording
Operating Expenses: Operating expenses increased by 51% during the three months ended April 30, 2024, as compared to the three months ended April 30, 2023. The $2.3 million increase in total operating expenses is primarily attributable to the following:
Current wording
Operating Expenses: Operating expenses increased by 24% during the six months ended July 31, 2024, as compared to the six months ended July 31, 2023. The $2.3 million increase in total operating expenses is primarily attributable to the following:
Previous wording
•One time legal settlement expenses of approximately $900 thousand, due to the Settlement Agreement with directors (see Note 9)
Current wording
•One time legal settlement expense of approximately $900 thousand, due to the Settlement Agreement with directors;
Previous wording
•Payroll and Related Expenses inclusive of stock-based compensation increased by approximately $271 thousand mainly related to increased sales and administrative personnel expense and additional stock-based compensation;
Current wording
•Payroll and Related Expenses inclusive of stock-based compensation decreased by approximately $93 thousand, mainly related to variable compensation arrangements; and
Previous wording
Other Expenses: Other expenses decreased by approximately $122 thousand to $41 thousand for the three months ended April 30, 2024, as compared to $163 thousand for the three months ended April 30, 2023. The decrease is primarily due to interest income in the current year of approximately $92 thousand.
Current wording
•Other Expenses: Other expenses decreased by approximately $239 thousand to $104 thousand for the six months ended July 31, 2024, as compared to $343 thousand for the six months ended July 31, 2023. The decrease is primarily due to interest income in the current year of approximately $155 thousand, and a decrease of interest expense of approximately $110 thousand, due to a lower debt balance.
Previous wording
As of April 30, 2024, we had working capital of approximately $6.8 million as compared to working capital of approximately $6.9 million as of January 31, 2024, relatively. The slight decrease in working capital is primarily attributable to an increase in cash of approximately $2.0 million, and an increase of accounts receivables of approximately $0.2 million, largely offset by a decrease of inventory of approximately $0.3 million, and an increase in accounts payable and accrued expenses of approximately $1.8 million.
Current wording
As of July 31, 2024, we had working capital of approximately $5.4 million as compared to working capital of approximately $6.9 million as of January 31, 2024. The decrease in working capital is primarily attributable to a decrease in cash and cash equivalents of approximately $3.7 million, a decrease in inventory of approximately $0.5 million a decrease in accounts payable and accrued expenses of approximately $2.6 million, and an increase in promissory notes - related parties of $0.3 million, partially offset by an increase in accounts receivable of approximately $0.3 million.
Previous wording
As of April 30, 2024, we have $0 outstanding under our Credit Agreement and approximately $4.2 million outstanding under our Term Loan Agreement with M&T Bank. The Term Loan Agreement has a maturity date of January 17, 2027. In addition, we have payments of $750 thousand (plus accrued interest) due on December 29, 2024 and 2025 pursuant to promissory notes issued to the sellers of T&L and Olive Branch, as discussed in Item 1, Note 6. In addition, we have a promissory note of $2.7 million with the sellers of CIF (as discussed in Note 1). Of the $2.7 million, a payment of $1.2 million is due on June 28, 2024, and $1.5 million is payable in common stock on June 28, 2025. We also have operating leases for offices and other facilities used for our operations and finance leases comprised primarily of machinery and equipment, as discussed in Note 10.
Current wording
As of July 31, 2024, we have $0 outstanding under our Credit Agreement and approximately $3.8 million outstanding under our Term Loan Agreement with M&T Bank. The Term Loan Agreement has a maturity date of January 17, 2027. In addition, we have payments of $750 thousand (plus accrued interest) due on December 29, 2024 and 2025 pursuant to the promissory notes issued to the sellers of T&L and Olive Branch, as discussed in Item 1, Note 6. In addition, we have a payment of $1.5 million in common stock due to the sellers of CIF on June 28, 2025. We also have operating leases for offices and other facilities used for our operations and finance leases comprised primarily of machinery and equipment, as discussed in Item 1. Note 10.
Previous wording
The following table summarizes the key components of our cash flows for the three months ended April 30, 2024 and 2023 (in thousands).
Current wording
The following table summarizes the key components of our cash flows for the six months ended July 31, 2024 and 2023 (in thousands).
Previous wording
Net cash provided by operating activities for the three months ended April 30, 2024 was approximately $3.6 million, which consisted of (i) net income of approximately $0.6 million, (ii) non-cash expenses of approximately $1.2 million, and (iii) changes in operating assets and liabilities of approximately $1.9 million.
Current wording
Net cash provided by operating activities for the six months ended July 31, 2024 was approximately $1.2 million, which consisted of (i) net income of approximately $1.7 million, (ii) non-cash expenses of approximately $2.3 million, and (iii) a decrease in operating assets and liabilities of approximately $2.8 million.
Previous wording
Net cash provided by operating activities for the three months ended April 30, 2023 was approximately $1.6 million, which consisted of (i) net income of approximately $1.4 million, (ii) non-cash expenses of approximately $0.6 million, and (iii) changes in operating assets and liabilities of approximately $(0.4) million.
Current wording
Net cash provided by operating activities for the six months ended July 31, 2023 was approximately $3.4 million, which consisted of (i) net income of approximately $3.1 million, (ii) non-cash expenses of approximately $1.6 million, and (iii) a decrease in operating assets and liabilities of approximately $1.5 million.
Previous wording
Net cash used in investing activities for three months ended April 30, 2024 was approximately $1.1 million and consisted of purchases of machinery and equipment.
Current wording
Net cash used in investing activities for the six months ended July 31, 2024 was approximately $2.7 million and consisted of purchases of fixed assets.
Previous wording
Net cash used in investing activities for three months ended April 30, 2023 was approximately $0.1 million and consisted of purchases of machinery and equipment.
Current wording
Net cash used in investing activities for the six months ended July 31, 2023 was approximately $0.9 million and consisted of approximately $0.3 million purchases of fixed assets and $0.6 million for the purchase of the remaining interest in CIF.
Previous wording
Net cash used in financing activities for the three months ended April 30, 2024 was approximately $0.5 million and consisted of approximately $0.4 million of payments on the Term Loan and approximately $0.1 million payments on finance leases.
Current wording
Net cash used in financing activities for the six months ended July 31, 2024 was approximately $2.1 million and consisted of approximately $1.2 million of payments of related party promissory notes, approximately $0.8 million of payments on the Term Loan and approximately $0.2 million payments on finance leases.
Previous wording
Net cash used in financing activities for the three months ended April 30, 2023 was approximately $0.6 million and consisted of approximately $0.4 million of payments on the Term Loan, approximately $0.1 million of payments on the line of credit, and approximately $0.1 million payments on finance leases.
Current wording
Net cash used in financing activities for the six months ended July 31, 2023 was approximately $1.3 million and consisted of approximately $0.8 million of payments on the Term Loan, approximately $0.4 million of payments on the line of credit, and approximately $0.1 million payments on finance leases.
Previous wording
As of the filing date of this report, there were no significant changes in our critical accounting estimates from those discussed in our 2024 Form 10-K. See Note 2 of Notes to Unaudited Condensed Consolidated Financial Statements for accounting pronouncements issued but not yet adopted that may impact the Company’s consolidated financial position, earnings, cash flows or disclosures.
Current wording
See Note 2 of Notes to Unaudited Condensed Consolidated Financial Statements for accounting pronouncements issued but not yet adopted that may impact the Company’s consolidated financial position, earnings, cash flows or disclosures.
Previous wording
As of the filing date of this report, there were no significant changes in our critical accounting estimates from those discussed in our 2024 Form 10-K. See Note 2 of Notes to Unaudited Condensed Consolidated Financial Statements for accounting pronouncements issued but not yet adopted that may impact the Company’s consolidated financial position, earnings, cash flows.
Current wording
As of the filing date of this report, there were no significant changes in our critical accounting estimates from those discussed in our 2024 Form 10-K.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Gross Profit Margin: The gross profit margin was 24% and 30% for the three months ended July 31, 2024 and 2023, respectively. The decrease in gross profit margin between the three months ended July 31, 2024 and 2023 is due to increased commodity costs, in particular the price of chicken, which were partially offset by customer price increases, improvements in procurement, and manufacturing efficiencies.
Current report — wording carried from elsewhere
Operating Expenses: Operating expenses were relatively flat in aggregate during the three months ended July 31, 2024, as compared to the three months ended July 31, 2023. The change in total operating expenses is primarily attributable to the following:
Current report — wording carried from elsewhere
•Payroll and Related Expenses inclusive of stock-based compensation decreased by approximately $364 thousand mainly related to variable compensation arrangements;
Current report — wording carried from elsewhere
The following table sets forth the summary of the condensed consolidated statements of operations for the six months ended July 31, 2024 as compared to the six months ended July 31, 2023 (in thousands):
Current report — wording carried from elsewhere
For the six months ended July 31, 2024 and 2023, the Company reported net income of approximately $1.7 million and $3.1 million, respectively. The change in net income between the six months ended July 31, 2024 and 2023 is due to the changes in net sales, costs of sales and operating expenses described below.
Current report — wording carried from elsewhere
Net sales: Net Sales increased by approximately 21.5% to $58.2 million during the six months ended July 31, 2024, from $47.9 million during the six months ended July 31, 2023. The increase in sales is due to volume gains, successful pricing actions, and the acquisition of CIF in June 2023. Volume gains were driven by increased demand at existing customers, successful trade and marketing promotions, same-customer cross-selling of new items, and new customer door expansion.
Current report — wording carried from elsewhere
Costs of sales: Costs of sales increased by approximately 29% to $43.9 million, or 75% of Net Sales, during the six months ended July 31, 2024, from $34.0 million, or 71% of Net Sales, during the six months ended July 31, 2023. The increase in costs of sales as a percentage of Net Sales is due to increases in commodity costs, in particular the price of chicken, partially offset by improvements in procurement, manufacturing and labor efficiencies.
Current report — wording carried from elsewhere
•Advertising expenses increased by approximately $419 thousand due to new strategies and enhanced focus to drive increased velocities of our existing products;
Current report — wording carried from elsewhere
•Amortization of intangible assets increased by approximately $478 thousand due to the acquisition of CIF, which was completed in June 2023;