Earnings Call Transcript - MAMA Q3 2024

Operator, Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Mama’s Creations Third Quarter Fiscal 2024 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. This conference is being recorded today, December 12, 2023, and the earnings press release accompanying this conference call was issued after the market close today. On our call today is Mama’s Creations’ Chairman and CEO, Adam L. Michaels; and Chief Financial Officer, Anthony Gruber. Before we get started, I’d read a disclaimer about forward-looking statements. This conference call may contain, in addition to historical information, forward-looking statements within the meanings of the federal securities laws regarding Mama’s Creations. Forward-looking 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 and are likely to differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors discussed from time-to-time in this report and in other documents, which the Company files with the U.S. 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 major litigation regarding the Company. In addition, throughout today’s call, the Company may refer to adjusted EBITDA, a non-GAAP financial measure, 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’s Creations website under the Investors tab. 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.

Adam L. Michaels, Chairman and CEO

Thank you, operator, and thank you to everyone for joining us today. I’d like to welcome you to our third quarter fiscal ‘24 financial results conference call. I’m very excited to be speaking with you all today, coming out of what was another strong quarter of consistently improving top and bottom line growth, representing even more evidence of what we believe is Mama’s true potential over the long term. We continued our reliable cadence of operational execution in the third quarter with strong double digit revenue growth and the year-over-year expansion of our gross margin profile by 460 basis points to 30.1%, validating our strategy and internal focus on our 3 Cs: Cost, Controls, and Culture. Both revenue and net income were up over 15% consecutively from the second quarter of fiscal ‘24, and we are now beginning to see the cumulative results from our efforts over the last year, ranging from our acquisition of CIF to formalizing and improving countless processes throughout the Company. Taken together, I believe we remain on track to continue our cadence of planned, persistent, and profitable growth in the years to come. Our team has worked together to drive a significant turnaround in the business in the last year, changing everything — but not the name. We made countless small changes at every level of the Company, from operations to logistics to administration, implementing operational KPIs under the mantra of "what gets measured gets improved." The results can be clearly seen in our gross margin profile, which improved from 11.9% in Q2 fiscal ‘23 to 30.1% today, as well as in our bottom line with our net income transforming from negative $700,000 in Q2 fiscal ‘23 to over $2 million today. Looking ahead into the next fiscal year, we see even more opportunities to further margin enhancement, particularly by leveraging strategic CapEx investments to build new in-house capabilities earlier in the value chain, improving automation at our production facilities and further building the capacity to support potential new Tier 1 national customers. Taken together these initiatives will position us to invest surplus gross margin into higher and more profitable trade promotion, which will serve as the rocket fuel for the next leg in our revenue growth trajectory. Early tests in trade promotion have driven promising results, and we look forward to right sizing our trade promotion investments in the quarters to come. At its core, our strategy and growth are being fueled by macro trends that continue to point in our favor. We are well positioned to capture share driven by the rapid shift in consumer preference towards deli prepared foods, which as a sector continued to grow in both price and volume. With the effects of the pandemic normalizing, food retailers are now investing heavily to increase space for the fresh-prepared, grab-and-go options, to differentiate themselves and appeal to the next generation of shoppers, capturing share from restaurants with healthy, high quality meals and creative new flavors at a favorable price point relative to takeout. Research from the Food Marketing Institute reports Gen Zers and millennials consume grocery deli prepared foods more often, and both report they expect to increase food service purchases in the future. More than half of shoppers recently surveyed say grocery deli prepared foods represent a good value compared to eating out at a quick service or fast casual restaurant or ordering takeout. Grocers have noticed this undeniable macro trend with 64% of grocery executives polled by Deloitte saying that the fresh department is the most strategically important area for their sales growth during the next 12 to 36 months, with the Food Marketing Institute reporting that three quarters of food retailers are planning to increase the space they allocate to food service. In-home dining has become a source of respite for our consumers seeking to avoid the ever present impacts of inflation, with trailing 12 months in-home food inflation running at 2.1% as compared to more than double that at 5.4% for out-of-home occasions, all on top of what has already been aggressive inflation since COVID began. We firmly believe prepared foods will continue to grow and take market share from the frozen, center aisle, and especially out-of-home occasions, creating a generational opportunity for deli prepared foods providers such as Mama’s Creations. As I’ve said before, realizing our goal of shaping Mama’s Creations into a one-stop shop for deli prepared foods has required a step change in our corporate structure in many ways. Throughout the third quarter, we remained laser-focused on the continuous foundational improvement of our 3 C 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 margin to grow from 12% when I started to this 30% range as you saw today. Our new ability to load share and produce leading products across our two facilities rather than having them each single sourced has established the framework to enable a much greater level of flexibility and agility that will ultimately provide us with both redundancy in production and lower costs. In addition, our significant investments in automation will position us to grow production capacity to support anticipated future Tier 1 customer wins, as well as to notably enhance margins which ultimately positions us to reinvest those gains in trade promotion, the rocket fuel for our growth. We are already harvesting the fruits — or shall I say, proteins — of our labor. For example, our gross margin saw an over 300 basis-point improvement year-over-year through significant procurement efficiencies, a further nearly 200 basis points through labor efficiencies as load sharing between facilities helped to drive reduced overtime. While most other companies would be ecstatic for such results, our team only sees it as justification to double down on our 3 C strategy to capture more savings for us to reinvest. On the controls front, I’m proud to say that we delivered on time, in full with the transitioning of our T&L Creative Salads division over to our NetSuite ERP system. This means that our full company is now on the NetSuite platform, providing us with a vastly improved degree of actionable insights into the details of our operations. While not as sexy, we also implemented our new SEC reporting systems, Workiva, which automates processing, allows us to close our books faster and frees up our finance team to focus on more value-added activities. Having our financial, operational and sales analytics at the touch of a button is truly transformational, something we saw after integrating NetSuite at MamaMancini’s and Olive Branch. As I’ve said before, what gets measured gets improved. We have proven it together over the past several quarters and these analytical capabilities that we are investing in in-house will continue to pay dividends for years to come. Another form of proof of our strategy comes from the response of our customers to our products. We recently heard from our QVC customers who once again voted MamaMancini’s products as number one in the “I Could Eat This Everyday,” “Best Sauce” and “Best Smart Swap” categories during the recent 2023 QVC Customer Choice Food Awards. It is truly an honor to receive this level of recognition for the fifth year in a row, beating out countless superb food products offered on QVC, a testament to the joy our products continue to bring to our QVC loyal consumers. QVC continues to be a tremendous, profitable and incremental channel for us, which also serves as an efficient R&D and innovation real-time testing platform. Finally and most importantly, I am proudest of the cultural evolution my teammates and I are creating. This quarter, we launched our first-ever employee engagement survey with an impressive 80% participation rate. I have seen early results with our amazing VP of HR, Abbey Meeks, and she is already sharing with our leadership team the three specific actions we are going to commit to for our people. Abbey also helped us implement our first-ever performance management system. I was lucky enough to have a mentor early in my career, Jon Katzenbach, and he taught me that you can’t change your culture, you change behaviors and behavioral change leads to cultural change. I am living that with my 250 colleagues every day at Mama’s, and I couldn’t be more excited for the renewed culture we are building together. We continue to invest in our people to further grow capabilities. And while not every hire gets a press release, we had several exciting appointments recently. Concurrent with the retirement of our COO, Matt Brown, at the end of fiscal third quarter, we announced the planned evolution of our leadership team with two new Vice Presidents of Operations appointments. Eric Felice was promoted to the role of Vice President of Operations, East Rutherford. Eric maintains over 25 years of operational experience, including over 10 years managing operations at our facility in East Rutherford, New Jersey. In addition, Ray Geer was promoted to the role of Vice President of Operations, Farmingdale. Ray draws on over 30 years of operations experience, including nearly 10 years managing operations at our facility in Farmingdale, New York. I am fully confident that these tested leaders now managing operations, further supported by the superbly talented T&L Creative Salads Founder, Anthony Morello, and our tenured Chief Administrative Officer, Steve Burns, that we are well positioned to continue to realize exciting new operational synergies between our new facilities. I want to share congratulations to Eric and Ray, and thank Anthony and Steve for their continued leadership. With the successful evolution of our finance and operations organization, I committed to my fellow shareholders that building our sales and marketing organization would be our next area of focus. I am proud to report that we again are successfully building differentiated capabilities ahead of schedule. We have nearly completed the build-out of our sales organization, growing from a single dedicated sales employee to five today, further supported by our Chief Marketing Officer and Head of Trade Strategy and Execution. Together, their goal is to continue to drive up our average items carried, accelerate our existing velocities and open new doors, building broad-based distribution. With our new team and capabilities, we increased the likelihood of opening up entirely new channels, whether that is the convenience channel, e-commerce channel, our major mass retailers such as Walmart or Target, opening these will be impactful to our growth trajectory, hence, our strategic CapEx investments to prepare for whatever the future may hold. In summary, I firmly believe that we are well positioned to leverage the build-out of our supercharged sales team and a compelling product portfolio to take market share, continue to grow our SKUs per customer and ultimately become the premier one-stop shop deli solution provider in the United States. As we continue to 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 our fellow shareholders for years to come. With that, I’d like to turn the call over to Anthony Gruber, our Chief Financial Officer, to walk through some key financial details for the third quarter of fiscal ‘24. Anthony?

Anthony Gruber, Chief Financial Officer

Thank you, Adam. Revenue for the third quarter of fiscal 2024 increased 11.5% to $28.7 million as compared to $25.7 million in the same year-ago quarter. The increase was largely attributable to volume gains driven by same-customer cross-selling, the acquisition of new customers and successful pricing actions. Gross profit increased 31.6% to $8.6 million, or 30.1% of total revenues, in the third quarter of fiscal 2024, as compared to $6.6 million, or 25.5% of total revenues, in the same year-ago quarter. The increase in gross margin was primarily attributable to successful pricing actions, the normalization of commodity costs and improvements in procurement, manufacturing and logistics efficiencies. Operating expenses totaled $5.9 million in the third quarter of fiscal 2024, as compared to $5.1 million in the same year-ago quarter. As a percentage of sales, operating expenses increased in the third quarter of fiscal 2024 to 20.7% from 19.7%. Operating expenses, as a percentage of sales, increased due to the addition of several new key hires, who brought new and differentiated capabilities to the organization. This figure includes a tripling of our marketing expenditures this quarter as we achieved many firsts for the Company and built out a best-in-class marketing program. Net income for the third quarter of fiscal 2024 increased 83% to $2 million or $0.05 per diluted share, as compared to a net income of $1.1 million or $0.03 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. Adjusted EBITDA, a non-GAAP term, increased 67.6% to $3.5 million for the third quarter of fiscal 2024, as compared to an adjusted EBITDA of $2.1 million in the same year-ago quarter. Cash and cash equivalents as of October 31, 2023, were $5.6 million as compared to $4.4 million as of January 31, 2023. The increase in cash and cash equivalents was driven by $1.5 million in cash flow from operations in the third quarter of fiscal 2024, $1 million of which was used to pay down the Company’s debt. As of October 31, 2023, total debt stood just under $10 million. Looking ahead, we believe that our normalized gross margin profile will continue to hover in the high-20% range. Our long-term goal, leveraging strategic CapEx investments, procurement efficiencies and continuous operational efficiencies would be targeting margins consistently maintained in the low-30% range, while rightsizing our trade promotion investments. One fact that I’d like to call out that we are quite proud of is that on top of the 460 basis-point improvement in gross margins, we still were able to double our trade investment in the quarter. Turning to net income. While we continue to target mid-single-digit net income margins, our long-term goal would be to improve 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?

Adam L. Michaels, Chairman and CEO

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 margin expansion. We will seek to reinvest our surplus gross margins as rocket fuel for our trade promotion budget, which we expect will ultimately snowball into increasingly robust revenue growth. Looking ahead, our near-term sales goals will be achieved by launching highly incremental products to further increase the SKUs per customer, introducing our products to new Tier 1 customers via our supercharged sales team, putting in place high ROI trade promotion programs to accelerate existing product velocities and further enhancing our margin through continuous operational improvements at every level of the organization. We believe that this approach will not only position Mama’s Creations as a one-stop shop deli solution provider but drive sustainable shareholder value creation over the long term. With that, I’ll turn it over to the operator to begin our question-and-answer session. Operator?

Operator, Operator

Operator instructions: Our first question comes from the line of Ryan Meyers with Lake Street Capital. Please proceed with your question.

Ryan Meyers, Analyst, Lake Street Capital

Hey guys. Thanks for taking my questions. Congrats on another solid quarter. Obviously, it looks like we saw sequential revenue growth once again, along with sequential EBITDA growth. Just wondering if you can comment on how we should be thinking about Q4 and what sort of seasonality we should be expecting?

Adam L. Michaels, Chairman and CEO

Yes. Thanks, Ryan. Great team effort. Q4 is usually our softest quarter. We do know, like you saw last year, it tends to be a little softer because many people aren’t shopping on Thanksgiving Day and Christmas Day, and hopefully people get to take some vacation. That said, we are still targeting to grow faster than the market and continue to gain share. We’re seeing that in the high single digits now between all of that, and we think we could continue to beat that.

Ryan Meyers, Analyst, Lake Street Capital

Got it. That’s helpful. And then just wondering if you can comment a little bit more on the new sales hires, what kind of productivity have you seen out of them, and then maybe if you can quantify how much new business they generated during the quarter? And then, if you have any sort of comments on how much business you think they can generate next year, whether it’s in terms of new customers or just overall revenue growth, it would be helpful to understand.

Adam L. Michaels, Chairman and CEO

No, it’s actually incredible, Ryan. I wish everybody on this call could have joined me. Last week we had our sales meeting — our entire sales team and the extended team got together to plan out next year and talk about customers. The culture and energy have been unlike anything we’ve had before. When I started we had one salesperson; now we have a full team, and the excitement is palpable. From what’s going to happen, everything is going to happen. We brought in a great guy, Art, who has lived his whole life in the convenience store channel. We have essentially no presence in C-stores today, and we’re going to open that up next year, along with e-commerce work that Lauren Sella is overseeing across our marketing efforts. These are real capabilities that we’ve never had before as a company, and I expect to see significant growth next year. Again, I continue to believe we’re going to continue to grow share. These folks are going to help us do that more confidently and at a higher rate than we would have without them. So new customers and new channels are going to be incredible. And again, Nick, who is leading all of our trade programming, brings capabilities we didn’t have before. The level of analysis we’re doing now on ROIs for every single program is unprecedented for this company. So we know exactly what we’re doing: what to do more of and which investments to stop. It has actually exceeded my expectations, this whole sales team coming together, and I love it.

Ryan Meyers, Analyst, Lake Street Capital

That’s great to hear. And then last question for me. I know average SKU per customer was 7 last quarter. Did that trend higher during the quarter? And what is that currently standing at?

Adam L. Michaels, Chairman and CEO

Yes, it’s good. A year ago this time it was at 6. We actually got it a little over 7 now. When new customers come in they often start with a couple SKUs, which can suppress the weighted average, but even with that dynamic we improved to just over 7. Some customers that did really well this quarter had fewer items but higher velocity, which also affects the weighted average. We continue to make progress and I expect to do even more with our new sales team.

Operator, Operator

Our next question comes from the line of Eric Des Lauriers with Craig Hallum. Please proceed with your question.

Eric Des Lauriers, Analyst, Craig Hallum

Great. Thank you for taking my questions. And congrats on another really impressive quarter here. My first question is a bit of a follow-up to the last question. We’ve seen year-over-year revenue growth accelerate from 5.9% in Q1 to now 11.5% in Q3. I was wondering if you could just help us understand the drivers of that acceleration. Obviously, there’s a number of things going on here. Presumably increasing SKUs per store is having the biggest impact there. But if you could just kind of help flesh that out a bit? Are there any velocity changes or new geographies to call out in addition to the increasing SKUs per store?

Adam L. Michaels, Chairman and CEO

Absolutely. A couple of things. Both of our major businesses — the legacy Mancini business and the T&L Creative Salads business — both grew double digits, so the whole company is contributing. A super majority of the growth was volume-driven, not just pricing, which is great to see. We also added some meaningful new customers and expanded distribution with existing customers. For example, Albertsons opened a whole new division in Northern California with some of our chicken products. We’ve also seen strong performance with DeMoulas, Cub Foods and Holiday Market. In addition to distribution gains and more SKUs per store, our marketing work is helping velocity. Lauren Sella, our Chief Marketing Officer, has run several test-and-learn programs this past quarter with promising results. For example, a promotion with a popular East Coast morning show helped get consumer attention and drive trial. So it’s really a trifecta: new customers and distribution, higher SKUs per customer, and marketing investing to drive velocity. That combination is driving healthy, volume-led growth across our businesses.

Eric Des Lauriers, Analyst, Craig Hallum

That’s great to hear. I appreciate that color. It sounds like everything is moving in the right direction here.

Adam L. Michaels, Chairman and CEO

Knock on wood.

Eric Des Lauriers, Analyst, Craig Hallum

My next question is on the margin impacts from CIF. If I look back, it looks like that was sort of expected to have 100 to 200 basis-point potential gross margin improvement here. I’m just wondering how to sort of combine that information with your target to keep gross margins ideally in the high-20s and sort of reinvest in trade promotion. Is this 1 to 2 percentage points incremental to that high-20s, or are you staying at high-20s and now have another 100 to 200 basis points of surplus margin to reinvest?

Adam L. Michaels, Chairman and CEO

First, I need to apologize for overdelivering on the high-20s — I’ll keep disappointing you in a good way. There are two or three things to note. The CIF acquisition has been tremendous not just for sales and margin but for the talent it brought to the organization. We absolutely see the 1 to 2 percentage point improvement from the acquisition. We overdelivered on the board thesis and I feel great about it. More importantly, the people we brought in from CIF brought capabilities we didn’t previously have, including freight management and accounts receivable processes, which have driven additional margin improvements — another 50 basis points or so this quarter. The real benefit of CIF was both the incremental sales and margin and the capabilities and talent that will continue to drive improvements.

Eric Des Lauriers, Analyst, Craig Hallum

That’s great to hear. My last clarifying question: did you say earlier that you had hired a new head of the C-store channel?

Adam L. Michaels, Chairman and CEO

We did. Yes. Art has joined us and he’s already making strong connections with the right brokers and distributors. His energy pushed the team in a very positive way at our sales meeting — he challenged me on my assumptions in his first week, which I love. So yes, we have a new hire dedicated to C-stores, and he’s helping us accelerate e-commerce and other channel efforts. We are building a team that’s going to win.

Eric Des Lauriers, Analyst, Craig Hallum

You press released the launch of direct-to-consumer e-commerce and called out club opportunities in the release and mentioned mass market in your prepared remarks. Can you help frame these opportunities relative to your traditional grocery channel? And in terms of priority and timing, when might we see results from C-store, e-commerce, club, or mass?

Adam L. Michaels, Chairman and CEO

We built our fiscal ‘25 plan with a bottom-up model, and while we won’t share the detailed customer-by-customer model, we are early in our distribution journey. We’re not in five of the top 10 national customers and not in Target, Walmart or the biggest Kroger banners yet, so there is substantial runway. We’re proud of over 8,000 points of distribution and a business that can exceed $100 million, but in the national context we’re still in the early innings. We’re not going to rush into big channels; we’ll enter them in an organized, profitable way. The sales and marketing capabilities we’ve built make opening new channels realistic, and when we do, it will be done with discipline to protect margins. We expect to make steady, profitable progress across C-stores, e-commerce, club and mass channels as our team executes against our plan.

Eric Des Lauriers, Analyst, Craig Hallum

Well, it’s certainly very impressive what you’ve all been able to do over the past year or so and certainly looking forward to as many opportunities to come. Thanks for taking my questions.

Adam L. Michaels, Chairman and CEO

Thanks a lot, Eric.

Operator, Operator

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

Howard Halpern, Analyst, Taglich Brothers

Congratulations, guys, another great quarter.

Adam L. Michaels, Chairman and CEO

Thanks, Howard.

Howard Halpern, Analyst, Taglich Brothers

Scanning the Q that’s out there I saw, could you describe what was the primary driver with the growth in the Midwest year-over-year and sequentially? Because it seems like it was a nice bump in the quarter.

Adam L. Michaels, Chairman and CEO

Yes. That was primarily due to a few things. First, Costco continues to get stronger for us and we had another rotation and a large order — in some regions our largest order ever has shipped. We also had successful rotations in multiple regions this year, including the Northeast, Midwest and Pacific Northwest, and now the Los Angeles region. Importantly, we recently got our sausage and peppers into the L.A. region of Costco, which is the first time we’ve had a non-meatball product in Costco — a meaningful milestone. Those Costco rotations in particular helped boost Midwest sales. Roundy’s, which operates under some Kroger banners, also contributed to the Midwest strength. So a combination of Costco rotations, new regional wins and strong customer execution drove the Midwest uptick.

Howard Halpern, Analyst, Taglich Brothers

What are you seeing in terms of how grocery stores are building out this part of their store? Is there an opportunity for the Meatballs in a Cup to go in that section of grocery stores going forward?

Adam L. Michaels, Chairman and CEO

Yes. Jewel, an Albertsons banner, is performing very well with our Meatballs in a Cup. We actually secured a refrigerated end cap in some stores, which is hard to get, and they featured both our beef and turkey meatballs. While the cups were originally intended mostly for C-stores, they’re starting to do well in the grocery space as well. There is also interest from the club channel for a multipack format, which we are investigating. So yes, the Meatballs in a Cup are starting to expand beyond C-stores into grocery and potentially club channels.

Howard Halpern, Analyst, Taglich Brothers

And all that eventually too could lead to increased volumes on the e-commerce side?

Adam L. Michaels, Chairman and CEO

Yes. If you go to our website, shop.mamamancinis.com, you can get our Meatballs in a Cup on our site now, and we expect these placements and interest to help drive e-commerce sales as well.

Howard Halpern, Analyst, Taglich Brothers

And just SG&A question. Are we now at a new level — is this sufficient to help fuel that double-digit growth that you hopefully will achieve over the next few years?

Adam L. Michaels, Chairman and CEO

We are thoughtful about SG&A. I don’t want one person to be the sole driver of capability decisions; we, as a leadership team, make those calls. We’ve made meaningful investments this year in sales, marketing and logistics and brought in talent that materially improves our capabilities. I think we’re mostly there from a headcount perspective — perhaps one or two more hires could accelerate the business further. But I want the right talent and the right amount of marketing. Marketing is often a below-the-line investment but is necessary to achieve our long-term ambitions. We will remain disciplined and focused on maintaining profitability while investing in the capabilities needed to scale. I believe we have the right mix to continue to grow profitably.

Howard Halpern, Analyst, Taglich Brothers

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

Adam L. Michaels, Chairman and CEO

Thanks so much, Howard.

Operator, Operator

Thank you. This concludes our question-and-answer session. And I will now turn the call back to Chairman and CEO, Adam L. Michaels, for his closing remarks.

Adam L. Michaels, Chairman and CEO

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 my fellow shareholders and execute on our vision of becoming a national one-stop shop deli solution provider. Thank you.

Operator, Operator

Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may now disconnect your lines at this time, and have a wonderful day.