- Record 1st Half 2013 Revenue of
$17MM
- New Chicago Production Facility on
Track to Open in December
Hot Mama’s Foods, Inc., (OTC:HOTF) a leading specialty food
manufacturer, co-packer and private label resource for innovative
organic, all-natural, and gourmet foods, which include fresh
hummus, salsas, and pestos sold under both its own label as well as
for other leading food retailers, today is providing a business
update.
“The current year has been an exciting and busy one for us as we
position the company for future growth” commented Matthew Morse,
Chief Executive Officer. "We have expanded both the executive and
senior leadership teams and have made substantial progress on a
larger manufacturing facility in Chicago. We also continue to
increase our product offerings and add new clients which is being
reflected in record revenue.” Mr. Morse further commented, “An
important step solidifying our future growth was becoming a
publicly traded company. Being a public Company will provide
additional financial flexibility as we continue to grow our
business both organically and through acquisitions.”
Financials. For the three month period ended June 30,
2013, Hot Mama’s Foods’ revenue increased 20.7% to a record $9.4
million compared to the same period in the prior year. This good
performance was driven by the Hummus product line which accounted
for 72% of revenue, up from 66% in second quarter 2012. Higher
volumes reflect effective marketing campaigns as well as increased
customer demand for Hot Mama’s higher quality products. Total
revenue for the six month period was $17.0 million, an increase of
18.8% over six months 2012. Looking ahead, revenue growth will be
driven by additional product offerings as well as increased sales
to existing customers.
Higher revenue also contributed to the gross profit increase of
8.7% in the quarter. Gross profit as a percent of sales, however,
was lower due to a combination of higher raw material and labor
costs. The company is taking steps to improve this with
productivity enhancements at the plant level. Selling General &
Administrative costs increased 22.4% in the quarter, 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 September 2013 merger. As a result,
profitability was impacted as the company made the necessary
investments to support future growth.
Plants. Hot Mama’s is increasing production capacity to
meet growing demand. Earlier in the year, the company signed a
lease for a 70,000 square foot facility in Wheeling, IL. Completion
of this facility is moving along as planned with first production
anticipated to begin before year end. By early 2014, the company
estimates it will have sufficient capacity to support upwards of
$100 million in revenue. The company is also planning to expand and
upgrade its owned facility in Springfield, MA. Projects underway
will not only increase capacity but will enable the company to
produce a more diversified portfolio of natural and organic food
products.
Products. Innovation and new product development are key
drivers of the business. The company has been able to successfully
drive top line growth through increased market penetration,
additional product offerings as well as promotional and marketing
efforts. Hummus sales, which accounted for 68% and 72% of revenue
in 2012 and second quarter 2013, respectively have also benefitted
from increased category growth with sales fueled in part by
increased consumer awareness. During the year the company
introduced several new flavors of existing products and began
production on frozen entrée’s and side dishes. Salsa is also an
important category for the company and accounts for approximately
12% of revenue and similar to Hummus, the company continues to
develop new and exciting products for its grocery customers.
“Diversification of our product portfolio is a key component to our
growth strategy,” commented Joseph Ward, President & COO. “Our
movement into the frozen entrée and frozen side dish category has
been driven through the on-boarding of two new co-pack customers.”
The company expects to introduce more than two dozen new products
in various categories over the coming year.
Customers. Recent new customer wins and growth within an
existing private label customer will add approximately $5 million
to revenue in the first year. Two new co-pack customers include (1)
Mama Mae’s, LLC (www.mamamaes.com) which markets a variety of
frozen entrees and side dishes under its brand name “Mama Mae’s”
and (2) BeetNPath, LLC (www.grainful.com) which markets a savory,
steel cut oat frozen entrée line under the “Grainful” brand.
Leadership Team. Having the right team in place was
necessary in order for the company to reach the next level of
growth. To that end, additional hires were required across many
areas of the company. The first of the year, Joseph Ward came
onboard as President and Chief Operating Officer. Joe brings over
16 years of related food industry experience, most recently at
Hanover Foods Corporation, one of the largest privately held food
processors in the U.S. In late summer, William Kenealy joined as
Chief Financial Officer. He has 20 years of experience in the
consumer products industry, including 13 years as CFO. Joe and Bill
join Matt Morse, CEO in the Executive Suite. Also joining earlier
in the year, was Evelyn Rivera-Riffenburg as Director of Human
Resources. Evelyn is a seasoned executive bringing over 20 years
experience in all aspects of Human Resources to Hot Mama’s. On the
operations side, the new team is also very experienced with Carl
Haag, Director of Business Development bringing 24 years of food
industry experience, both branded and private label and Mark
Kretzinger, VP of Research & Development having of 25 years of
culinary experience, including 14 years of new product development.
Jose Reyes rounds out the new hires having joined last month as
General Manager – Midwest Operations. He has extensive experience
in Lean manufacturing as well as, a strong solution focused,
analytical approach to manufacturing.
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%. In 2012 revenue
increased 35.8% to $28.9 million. 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.Matthew Morse, 413-737-6572Chairman &
CEOorSTRATEGIC ADVISOR:Strategic Universal Advisors, LLCStan
Altschuler, 212-838-1510President
Hot Mamas Foods (GM) (USOTC:HOTF)
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