By: Tomas Ronolski - AllPennyStocks.com News

Friday, June 13, 2014

In 1983, Carl Wolf founded Alpine Lace Brands, a New Jersey-based marketer of meat and cheese. The company is still around today; only it has abandoned the meat offerings in favor of selling five different types of cheese for consumers with active, healthy lifestyles. Wolf left the Alpine Lace scene in October 1997, selling the company to Land O’Lakes, Inc. for $62 million. Wolf’s latest project, MamaMancini’s Holdings, Inc. (OTCQB:MMMB) looks to be charting a similar path to success and staying power. With a market capitalization of $78.3 million, MamaMancini’s is already valued higher than Alpine Lace Brands was (although factoring inflation the $62 million is over $100 million in today’s dollars) and looks to be hitting its stride with product and distribution expansion.

The company offers 11 products currently (seven of which were launched in the first quarter), mostly centered on authentic Italian dishes from founder Dan Mancini’s grandmother’s recipes. Products include a line of all natural, beef meatballs with sauce, turkey meatballs with sauce, chicken meatballs with sauce, pork meatballs with sauce, gluten-free meatballs, sauces and the latest offering, a penne pasta dish dubbed Mac n’ Mamas. Four new products are expected to be released in the coming weeks.

MamaMancini’s products can be found in more than 8,000 retail locations in the U.S., including Kroger (NYSE:KR), Walmart (NYSE:WMT), Costco (NASDAQ:COST) and Alberstons, to name just a few. Even with the strong presence, Wolf, who serves as chairman and chief executive at MamaMancini’s, sees plenty of room for expansion as gauged by the latest investor presentation on the corporate website. Looking at the leading supermarkets, the company has only penetrated about 25 percent of the market, leaving about 24,000 locations where its products still aren’t found on retail shelves. Further, the company only averages about 3.2 products per store, giving room for horizontal growth in existing retail locations.

On Friday, the company released its results from the first quarter of fiscal 2015 ended April 30, which showed solid growth. Compared to the same period in fiscal 2014, MamaMancini’s had expanded its shelf space to 26,000 from 16,000, an increase of 62 percent. Revenue rose 46 percent year-over-year, from $1.77 million in last year’s quarter to $2.58 million in the recent quarter.

Gross margin improved from 28 percent to 31 percent, thanks in part to new automated systems being installed in the East Rutherford, New Jersey manufacturing facility, improved product mix and decreased slotting fees and discounts.

Operating expenses increased from $1.1 million in the year prior quarter to $1.49 million as the company ratcheted up marketing initiatives, which include ads being run on SiriusXM (NASDAQ:SIRI). As a result, net loss widened slightly to about $700,000, or 3 cents per share, compared to $610,000, or 3 cents per share, in the year prior quarter.

At the end of the quarter, MamaMancini’s had no long-term debt, working capital of $3.52 million and cash and cash equivalents of $1.08 million.

"We continue to make significant strides in building out the MamaMancini's brand and believe we are on the path for continued growth,” said Carl Wolf in a prepared statement today. He added, “We are extremely excited about the progress achieved to this point. We believe Fiscal 2015 is off to a great start and should be one of continued growth, especially as we ramp-up production of our newly introduced products and add new store shelves in the coming quarters.”

Shares of this thinly-traded company are down 11.3% to $2.75 in mid-day Friday trading following the financial report. There are only 25.26 million shares outstanding and insiders hold more than half of them, making for a tight float and a stock price that can move very easily either direction with little pressure. As the company fills up its product portfolio and further expands its retail footprint, this could be an interesting growth play going forward. Proper due diligence is, as always, encouraged.

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