SPRINGFIELD, Mass.--(BUSINESS WIRE)--Hot Mama’s Foods, Inc. (OTCQB:HOTF), a leading specialty food manufacturer, co-packer and private label resource for innovative organic, all-natural, and gourmet foods, has announced its financial results for the 2013 fiscal year. A Form 10-K was filed with the Securities and Exchange Commission on April 8, 2014.
Commenting on the financial results, Matthew Morse, Chief Executive Officer stated, “2013 was a year with several key accomplishments and investments to support future growth. We successfully tapped the equity capital markets, acquired a new state-of-the art production facility, added several new products and expanded the executive management team.”
Mr. Morse further commented, “Revenue for 2013 was a record high $33.3 million, although profitability was impacted as we made the necessary investments to facilitate future growth. Our focus on innovation and high quality resonates with our customers and I am pleased that we added several new customers and products to our mix last year. Our new plant, with the ability to produce several categories of fresh food products, provides even more opportunities for us to add new products and continue to drive growth for the company. As we look forward to 2014 and beyond, we feel very good about our ability to achieve sustainable top line and bottom line growth.”
2013 Financial Overview. For the year ended December 31, 2013, Hot Mama’s Foods’ revenue increased 15.2% to $33.3 million compared to $28.9 million in 2012. Sales continue to be driven by Hummus products which grew 17.3% in 2013 and accounted for 71% of revenue, up from 68% in 2012. Salsa sales represented 12% of total company revenue in both 2013 and 2012. Higher volumes reflect effective marketing campaigns as well as increased customer demand for Hot Mama’s higher quality products. Looking ahead, revenue growth will be driven by additional product offerings as well as increased sales to existing customers.
Gross profit of $4.9 million was flat with the prior year, due primarily to higher raw material and labor costs. Gross profit as a percent of sales was 14.9% in 2013 compared to 17.2% in 2012. Ongoing productivity enhancements at the plant level along with the new state-of-the art production facility should contribute to an improved cost structure.
Selling General & Administrative (SG&A) costs, which includes stock-based compensation, were $6.9 million, up 61.8% from $4.3 million in 2012, primarily reflecting one time grants of stock related to the company’s September 2013 merger. Excluding the stock-based compensation expense, SG&A increased 22.7% in 2013, with the increase primarily attributable to an increase in payroll as the company expanded its executive and leadership ranks, as well as costs associated with the aforementioned merger. The Company also incurred a restructuring charge of $79,000 in 2013 related to an operational review to improve efficiency and reduce overhead. As a result of all these actions, profitability was impacted as the company made the necessary investments to support future growth.
The Company reported a per share loss of $0.07 in 2013, compared to net income per share of $0.02 in 2012. Stock-based compensation expense and other one-time costs associated with the merger amounted to approximately $0.06/share in 2013.
In early 2014, the company began production at its new 120,000 square foot facility in Wheeling, IL. This additional plant was needed to fulfill existing business, support expected demand as well as expand production capabilities. This plant with state of the art equipment will enable the company to produce a wider range of fresh food products. Additionally, the Springfield, MA plant is being re-tooled to provide production of an even greater diversified portfolio to include sauces, butters, fresh and frozen entrees and sides and other specialty food products.
ABOUT HOT MAMA’S FOODS
Hot Mama's Foods is a leading specialty food manufacturer, co-packer and private label resource for innovative organic, all-natural, and gourmet foods. The Company has proven expertise in developing and manufacturing top quality salsas, sauces, pesto, hummus, salads, dips, prepared deli salads, and many other gourmet foods. Hot Mama’s Foods is one of the largest producers of hummus and salsa in the United States. The Company’s products are USDA Certified, Certified Organic, and independently audited. Hot Mama’s provides versatile, highly time-sensitive services to discerning food retailers, foodservice customers and food brokers nationwide. Hot Mama’s Foods also develops, produces and sells fresh salsas, hummus and other fresh food products under its own label – Hot Mama’s Foods. The Company has state-of-the-art production facilities in Springfield, MA and Elk Grove Village, IL.
Hot Mama’s Foods was formed in Wendell, Massachusetts, in 1984, as a maker of a variety of fresh salsa recipes, distributed directly to small local retailers by its owner-operator. In 1991, the Company was purchased from its founder by Matthew Morse and maintained as a sole-proprietorship until its incorporation on January 29, 1999 under the name Lansal, Inc. under the laws of the Commonwealth of Massachusetts.
The Company has experienced rapid growth in recent years. Since 2008, revenue has increased slightly over 100%. Growth has been driven by increased market penetration, additional product offerings, and, in part, by promotional and marketing efforts increasing awareness of the hummus category in particular. Additional information about the Company can be found at www.hotmamasfoods.com and at the SEC’s web site www.sec.gov.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this press release are forward-looking statements. These statements relate to future events or to the Company’s future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company’s control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. Such risks, uncertainties and other factors, which could impact the Company and the forward-looking statements contained herein, are included in the Company’s filings with the Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
HOT MAMA’S FOODS, INC.
Consolidated Statements of Operations
(Amounts in thousands, except share and per share amounts)
|For the years ended December 31,|
|Cost of goods sold||28,365||23,960|
|Selling, general and administrative||6,930||4,284|
|Total operating expenses||7,009||4,284|
|Income (loss) from operations||(2,052||)||687|
|Other income (expense):|
|Gain on sale of fixed asset||19||-|
|Total other expense||(132||)||(137||)|
|Income (loss) before income taxes||(2,184||)||550|
|Provision (benefit) for income taxes||(775||)||231|
|Net income (loss)||(1,409||)||319|
|Net income (loss) attributable to non-controlling interest||(44||)||(33||)|
|Net income (loss) attributable to Hot Mama’s Foods, Inc.||$||(1,365||)||$||352|
|Basic and diluted income (loss) per common share||$||(0.07||)||$||0.02|
|Weighted average number of shares outstanding|
|Basic and diluted||19,467,161||18,512,303|